Debt Snowball

What Is the Debt Snowball Method?

Popularized by Dave Ramsey, the debt snowball method focuses on quick wins. You list all your debts from smallest to largest balance (ignoring interest rates) and attack the smallest with every spare dollar while paying minimums on the rest.

Steps

1. List debts from smallest to largest balance.
2. Pay the minimum on all except the smallest.
3. Throw every extra dollar at the smallest debt until it’s gone.
4. Roll that payment into the next debt, like a snowball rolling downhill.

Why It Works Psychologically

Seeing a debt disappear gives you a dopamine hit and keeps you motivated. Mathematically, the avalanche method (highest interest first) saves more money, but the snowball has a higher success rate because of human behavior.

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Last verified: July 2026