The path to financial well-being is going to take eliminating or at the very least reducing the amount of debt that you owe. A very common and effective strategy to help you to pay off debt is the known as the debt snowball. It’s a fairly simple strategy to apply as long as you’re committed to squashing your debt!

Picture a snowball that starts off little as it rolls down a hill, but gets bigger as it continues rolling and turns into to a snow boulder as it builds momentum! That’s how the debt snowball method works. It’s a strategy that allows you to gain momentum as you pay your debt off. As the momentum gains, the quicker you’ll see your debt disappear.

“Debt is like any other trap, easy enough to get into, but hard enough to get out of.” – Henry Wheeler Shaw

Start by listing of all your debts in order from the lowest balance to the highest balance. Now, any extra cash you have needs to go toward the lowest balance first, until that lowest balance is paid off. Once the lowest balance is paid off, whatever payment was being made toward that balance, along with any extra cash, would now go toward the next lowest balance on your list. For example, if you were paying $125 monthly on the lowest balance and $57 on the second lowest, whenever you repay the smallest, take that $125 and the $57 so that now you can pay $182 monthly on that next balance.

Continue to repeat those steps and keep applying payments to debts until you have everything paid off! Obviously, keep in mind that during the time of applying this strategy and paying off the debt, it’s absolutely crucial that you don’t continue to accumulate any more debt. Accumulating more debt during this process will completely defeat the purpose. So, stay focused on getting rid of your debt and let the debt snowball do its thing!

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