What is the Debt Snowball?
The Debt Snowball is the process Dave suggests using to pay off debt. Here’s how it works: list your debts in descending order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs. In this case, list the higher interest rate debt first.
The Debt Snowball is the process we suggests using to pay off debt. Here’s how it works: list your debts in descending order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs. In this case, list the higher interest rate debt first. Pay the minimum payments on all of your debts. After you’ve paid the necessities and minimum payments for the month, put any and all money left over onto the smallest debt. Attack the smallest debt and get that thing paid off as quickly as possible. Once that smallest debt is paid off, move on to the next smallest debt and start making extra payments on that one. You now have more dispensable income because you have one less debt. Just like a snowball gets bigger as it rolls downhill, that’s what is going to happen to your Debt Snowball when you use this method!
