Paying Off Debt Using The Snowball Method

The snowball method is a strategy for paying off debt that starts with your smallest balances first, regardless of interest rate. This method creates quick wins, helping you see immediate results and build momentum as you pay off each debt one by one.

As Kanwar Singh, Branch Manager at First Alliance Credit Union, shared on the Good Money Moves podcast,

"The debt snowball is really about starting small and building up bigger, like a snowball would if it was rolling down a hill." 

By focusing on the smallest balances, you gain confidence as you see your credit card accounts closed and debts disappear. This psychological boost can be the difference between feeling overwhelmed and feeling empowered on your financial journey.

Step-by-Step Guide to Starting Your Debt Snowball

This simple framework makes debt payoff more approachable by breaking it down into manageable, measurable steps. Instead of trying to tackle everything at once, you’re following a clear, organized plan that shows you exactly what to do next and how your efforts are paying off over time.

Step 1: List Your Debts

First, list your debts from smallest balance to largest, ignoring interest rates for now. This might include credit cards, personal loans, medical bills, or store cards. For example, if you have credit card debts of $500, $1,000, $3,000, and $5,500, you’d tackle the $500 one first. Seeing that smallest balance disappear quickly gives you an early win and a big confidence boost.

Step 2: Make The Payments

Next, make minimum payments on all your debts except the one with the smallest balance. Put as much extra money as you can toward paying off that smallest balance, this might come from trimming non-essential spending, using part of a bonus or tax refund, or redirecting money from other areas of your budget. Once that smallest debt is paid off, roll the full amount you were paying on it into the next smallest debt, on top of its minimum payment.

Step 3: Repeat the Process

Then, repeat the process, working your way down the list. As each balance is eliminated, the amount you can apply to the next debt grows, creating a snowball effect. Over time, your payments get larger and your remaining balances shrink faster, helping you build momentum and stay motivated as you move closer to becoming debt-free.

Kanwar shared on the podcast , "The snowball method really helps you build up momentum and it really motivates you, so that you keep making progress towards your goals."

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Staying Motivated: Celebrating Small Wins Along the Way

Motivation is key to following through on your debt repayment plan. The snowball method is designed to keep you motivated by providing quick, visible progress that you can actually feel in your day-to-day life. Each time you pay off a smaller balance, you free up a little more room in your budget and see one less bill to worry about each month. That sense of relief and accomplishment can be incredibly powerful.

"You start seeing the results of your hard work right away," Kanwar emphasized. "Every debt you pay off is a win worth celebrating, no matter how small."

Instead of feeling like you’re chipping away at a mountain with no end in sight, the snowball method gives you regular, tangible proof that your efforts are working. Those early wins help you stay emotionally invested in your plan, making it easier to keep saying “no” to unnecessary spending and “yes” to your long-term goals.

For additional motivation, you can mark each debt payoff milestone and reward yourself in a budget-friendly way. That might mean enjoying a special cup of coffee, planning a low-cost movie night at home, or setting aside time for a favorite hobby. These simple, intentional rewards reinforce your good habits without derailing your budget. Over time, these small victories help you stay consistent and focused, even when the journey feels long or progress feels slow.

Watch & Learn: What is the Debt Snowball Method?

You'll know how to use the debt snowball method to pay off your debts after watching this free episode of the Good Money Moves podcast!

Overcoming Obstacles and Common Pitfalls

Sticking to any debt payoff plan can have challenges. One of the biggest pitfalls with the snowball method is ignoring interest rates, which can mean paying more in the long run compared to other pay off strategies.

However, Kanwar pointed out,

"It really depends on your situation. If you need quick wins for motivation, the snowball method can be the right fit." - Kanwar Singh

The most important things are to be honest with yourself about your spending habits, stay disciplined, and adjust your plan if life changes. If you start to lose focus, revisit your progress, remind yourself of your goals, and don’t hesitate to ask for support.

"Having a strategy, then staying true to that strategy, and having the discipline to making those financial decisions" is key, Kanwar shared. 

If you’re more concerned about saving money on interest, the avalanche method or debt consolidation might be a better fit. Remember, the best method is the one you can stick with and that fits your personal situation and goals.

Leveraging Professional Support for Debt Payoff

If you’re feeling stuck or unsure about which debt payoff strategy is right for you, First Alliance Credit Union is here to help. If you're not sure which debt strategy is best for you or even how to start laying that out, you can talk to our team. They can help you figure out your debt payoff strategy and set a plan in motion, and they'll be your cheerleader along the way.

Our team understands that no two financial journeys are the same. We’ll work with you to build a personalized debt payoff plan, combining education, encouragement, and practical tools. Whether you choose the snowball, avalanche, or a hybrid approach, First Alliance is committed to helping you achieve financial freedom and stay empowered every step of the way.

Get Personalized Debt Payoff Guidance Today!