How To Use The Debt Snowball Method to Pay Off Debt

It’s funny how we can spend years swiping credit cards, taking out loans and building up finance, and then one day we turn around and decide we want to pay off all of our debt. It’s easy to feel overwhelmed when you think about where to start when it comes to paying off debt, especially if you have different types of debt with different creditors with different balances and different interest rates. Paying off debt isn’t an easy task, although it’s the first step to achieving financial freedom.

In this post, I want to tell you about the Debt Snowball Method, and how it has proven success for lots of people paying off their debt and becoming debt free.


The debt snowball method is a debt repayment strategy, which has been popularised by personal finance author Dave Ramsey. It is targeted towards people who have numerous debts to pay off, and focuses on paying down your small debt balance first, before moving on to larger balances.

When the smallest debt balance has been fully paid off, you can then throw the money you were paying on that debt towards the next smallest balance. The idea behind the snowball method is that once you have paid off one balance, you will feel a sense of achievement, which will help to keep you motivated to continue repaying your debt.

The idea is to repay the minimum monthly amount required on all of your debts, while contributing extra to your smallest debt. Keep going until you make a giant snowball payment against your largest debt.



The first step is to list your debts from smallest to largest, regardless of interest rates. Don’t worry about adding your mortgage to the list, just include credit cards, loans and finance.

Make sure to review your budget and figure out how much money you can afford to put towards your smallest balance. Remember not to skint yourself for the month though.

Once you have paid off the smallest balance, put the extra money you were using towards the next smallest balance until it’s paid off, and rinse and repeat this process until you’re debt free.

Let’s say you have four debts: £3,000, £4,000, £2,000 and £1,000 and you’re not sure which one to focus on paying off first. You would need to order these balances accordingly:

  • Debt 1: £1,000 (£50 minimum repayment)
  • Debt 2: £2,000 (£60 minimum repayment)
  • Debt 3: £3,000 (£75 minimum repayment)
  • Debt 4: £4,000 (£80 minimum repayment)

For this example, let’s say you have £800 to pay towards your debt each month. In month 1, you pay the minimum repayments to debts 2, 3 and 4. However, for debt 1, you pay the minimum payment plus an additional £535 a month, from your £800 budget. By month 2, you would have repaid debt 1, and you now have an extra £585 to contribute towards this balance.


Although it is a great way to pay off your debt, it’s important to note that it isn’t a one size fits all method and depends entirely on each person’s situation. Those in debt should seek help to find the best way to repay their debts that suits their individual circumstances.

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