Snowball Method: What Does It Mean?

The debt snowball method is a strategy to pay down debts, by adding more to the minimum payments each month. Any additional payments or “snowball” are focused on one debt at a time, while still paying the minimums on your other obligations.

The debt snowball method focuses on the debt with the smallest balance first. Once the first debt is paid off, the “snowball” and that debt’s minimum payment is added to the next smallest balance.

Prioritizing the smallest balances first will allow you to build momentum as you scratch off one credit card or loan from your obligations. This can reduce stress and encourage you to keep going with your debt paydown plan.