How I Paid off $20,000 in Debt Using the Snowball Method

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If you feel like you’ve been running on a treadmill trying to tackle a never ending pile of debt, the snowball method may be exactly what you’ve been needing in your life. I say this from personal experience. I just used this method to pay off nearly $20,000 of credit card debt that I stupidly accumulated.

This debt repayment method isn’t just a structured, mathematically strategic way of paying down debt. The snowball method aims to change the way that you think about debt, and gives your motivation levels a boost.

What Exactly is the “Snowball Method”?

The Snowball Method is a debt repayment tactic that is powered by motivation. The focus is on changing the way you think about debt repayment, not necessarily the calculations and other fine details that go into it.

In order to keep your motivation fueled, the idea is to start with your smallest debt and allow your hard work to “snowball” as you work then work on your larger debts once the smaller ones have been repaid.

No fancy budgeting notebooks or apps.

Although, it will definitely help to write things out and organize your process at least and see what you are working with. Being able to see your progress is where the magic comes from with the Snowball method.

Who Created it?

Dave Ramsey is the financial-guru behind the Snowball method as well as the author of number of best-selling books AND host of the successful Dave Ramsey Show. His website reports that he has a faithful 23 million listeners tuned into his show every single week. The guy has got to be doing something right.

I know in the last section I said you don’t even need an app to make this method work. And you don’t! I did want to mention, however, that Dave Ramsey did create an app called the “Every Dollar Budget App” that’s free to use. I haven’t given it a try yet. Just wanted to share that information for anyone who prefers to have an app or some sort of system when working towards a goal.

How Does the Snowball Method Work?

As I talked about earlier, the Snowball Method focuses on changing your mindset about repaying debt by having you focus on paying down your smallest debts first. Ramsey refers to it as a “debt reduction strategy” on his website.

Ramsey lists four straight forward steps to following his Snowball method and changing the way that you think about and even feel about repaying debt. The feeling of loathing the fact that you have to pay all this money to debts may not go away, but you will feel more empowered about doing so with this method.

Step 1 is to simply list out all of your debt balances in order from smallest to largest.

You don’t need to take interest rates into account for this step. If you have a high balance with a crazy interest rate, such as a student loan, you may not get anywhere very fast if you try to tackle this balance first. As Ramsey points out, doing this you may “lose steam” rather fast because it’s like saying you want to climb a mountain but choose to conquer Mount Everest as your first ever trek.

Step 2 instructs for you to budget out to pay the minimum to each of your balances each month except for your smallest balance.

Yes, little budgeting is still required while using the Snowball method. But that’s for your sake. You still need to be able to pay for other necessities each month of course. You’ve already been paying these minimum amounts due for awhile now I’m sure. So they should be roughly fit into your budget already.

Step 3 is where the “Snowball” begins because now you are going to start paying the most that you possibly can towards your smallest balance each month.

As you watch your smallest balance shrink and quickly disappear, your motivation to continue abolishing your debt will “snowball” so to say. It’ll grow and grow and your debt shrinks and shrinks.

I speak from my own experience of repaying thousands of dollars of debt using this method. Having the right mindset and motivation to get your finances back in your control makes a world of difference!

I would love to hear about your experience with the Debt Snowball Method or any other debt repayment method that you’ve tried and found success with in the comments below!