My Thoughts on The Debt Snowball Method

Many people including myself are in debt. The amount of debt that people are in may differ, but many of us want to eliminate that debt as soon as possible. During the last 3-4 years, I’ve read at least 60 stories where people have paid off their debt. Those stories motivated me to finally get started with paying on my debt. I saw people paying on their debt using several different methods. I found one that intrigued me more than any of the others. It was called the debt snowball method.

The debt snowball method is a way of paying off your debt that was made popular by Dave Ramsey. He wrote a book about it called The Total Money Makeover. With the debt snowball method, you list your debts in order from smallest to largest. You make the minimum payment on all of the debts except the smallest. You then put as much money on the minimum as possible. Once that debt is paid off, take the money that you used to pay that one and combine it with the minimum payment of the next smallest one. As you continue to do this with every debt, the payment amounts will keep getting bigger. This creates a snowball effect. Below is an example of the method. This person has three debts.

Credit Card A – $100 balance ($25 minimum payment)

Credit Card B – $300 balance ($25 minimum payment)

Student Loan $1000 balance ($50 minimum payment)

Imagine that this person is applying an extra $25 to credit card “A” each month. That card would be paid off after month number two. The $50 that was going toward credit card “A” will now be added to credit card “B,” thus making the new payment amount $75 per month. Credit card “B” would then be paid off after month number six.  Now you add the $75 payment to the $50 for the student loan payment. Now you are paying $125 on the student loan. This loan will now be paid off after month number 12. In one year the snowball method has allowed you to pay of three debts. Of course, the higher the debt is, the longer it will take. The point that I’m trying to make is to show people that this method works.

I’ve been using the debt snowball method since January 2015. During that time, I’ve been able to eliminate three of my debts. Another one will be gone before the year is up. For me, I will say that it has been working. I’m the type of person that needs to see things getting smaller. As the debts are being paid off, I can see the snowball getting bigger.

I’d suggest the debt snowball method to anyone that is attempting to pay off debt. It’s easy and simple to start. Some people like paying the debts with the highest interest first, I understand why they might do it, but I’m a fan of seeing small wins. The snowball method allows you to see them.

For more information about the snowball method, you may want to check out Dave Ramsey’s website.

Have you used the debt snowball method before? Did it help you eliminate your debt quicker?

Jason Butler

Jason Butler is an Atlanta native, as well as businessman, blogger and teacher. Not only is Jason a prolific flipper, marketer, writer and side hustler his number of years in higher education and student support have given him expert knowledge in understanding the economics of the student loan industry.