Many people find themselves reading about the debt snowball method of reducing debt when doing online research. The question you’re probably asking yourself is “Does this actually work?” The short answer is yes. The snowball method has many benefits and practical applications. In a sense, you simply pay off your smallest debts first and hack away at the rest over time. Directing your loan payments like this works great because you’re focusing on one payment at a time. Doing this, you can quickly pay off the entirety of a bill and get rid of the excess interest you’re accruing.

Why the Debt Snowball Method Works

It’s best to visualize an example when thinking about the snowball method. Imagine you have accrued the following debts.

  • $1,000 in medical bills with $75 as the minimum payment
  • $2,000 in credit card bills with $100 for the minimum payment
  • $20,000 in student loan and $200 a month for the payment

Ignoring the interest rates, the best plan of attack is to continue paying the minimum amount for each, except the medical bill. For the snowball method to work, you want to use any spare cash you have from working extra jobs or money received from family and apply that to your smallest bill first. You should be able to pay that bill off relatively quick.

The next step is to move on to the next bill, which in this case is the credit card. With your medical billed completely paid off, you can then apply the minimum payment amount you were using for the medical bill to your credit card. As you did before, any extra cash will also go to this bill while continuing to make the minimum payments on your student loans.

When you’ve paid off all other debt using the snowball method, you can move on to the big kahuna, your largest debt (student loans in the example). At this point, you can afford to add all your previous minimum debt payment amounts to this bill each month. On top of that, you can put any extra money into the bill whenever you can.

The long-term effect of the snowball method is reducing debt and interest as quickly as possible and giving you the flexibility to increase your monthly payments for your larger bills.


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