Debt Snowball Calculator
The Debt Snowball method focuses on quick wins. Pay off your smallest debts first to build momentum and crush your total debt.
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Snowball Strategy
Add your debts to see your personalized payoff plan.
How the Debt Snowball Method Works
The Debt Snowball is a debt reduction strategy where you pay off your debts in order of smallest to largest balance. This method prioritizes psychological wins over mathematical interest savings.
The 4-Step Process:
- List your debts from smallest balance to largest.
- Make minimum payments on all debts except the smallest.
- Pay as much as possible (your "Snowball") on the smallest debt.
- Once the smallest is gone, take its entire payment and move it to the next smallest debt.
As each debt is eliminated, the amount you "roll over" to the next debt grows larger and larger—like a snowball rolling down a hill—until you are completely debt-free.
Debt Snowball FAQ
1. Why start with the smallest balance instead of the highest interest?
Behavioral science shows that seeing a debt disappear quickly provides the motivation needed to stick with the plan. It's about momentum, not just math.
2. What is the difference between Snowball and Avalanche?
Snowball orders debt by balance size (smallest first), while Avalanche orders them by interest rate (highest first).
3. How much extra should my snowball be?
As much as your budget allows. Even an extra $50 a month can shave months or years off your total payoff time.
4. Should I stop saving for retirement while doing the Snowball?
Dave Ramsey's plan suggests pausing retirement until all non-mortgage debt is gone to create "gazelle intensity" and finish faster.
5. What if two debts have similar balances?
If the balances are close, pay off the one with the higher interest rate first between those two.
6. Should I pay off my mortgage with the Snowball?
The Snowball is typically used for "consumer debt" (credit cards, medical bills, car loans). The mortgage is usually handled separately in later steps.
7. Does this method work for student loans?
Yes. If you have multiple student loan groups, treat each group as an individual debt line in your snowball.
8. How do I handle a debt that goes into collections?
Debts in collections should usually be settled last or handled after you've secured your basic needs (Four Walls: Food, Utilities, Shelter, Transport).