What is a Debt Snowball


Think of the snowball effect. How a snowball rolling down a hill will gather more and more snow to become larger and roll faster due to more weight. 
Now put this towards your debts. End of post. haha jk. 
I'll walk though an example one- I think seeing it really helps to relate it to your own. 

Say you have 2 credit cards, 2 student loans, and a car loan (I think that’s like the average persons debt). I’m going to make the numbers easy to follow, I know they’re not accurate but just go with it!

Credit Card #1 : 1,000

Credit Card #2: 2,000

Student Loan #1: 5,000

Student Loan #2: 15,000

Car Loan: 20,000

The first step is to list them in smallest to largest. Some people like to take into account the API (interest) on the loan. And list from highest to smallest interest rate. Personally I like to go by the amount since it keeps you motivated!

Next is to figure out what the minimums for all are and how much you can budget towards debt.

Here is an example of the mins for these, equaling $750, and let’s say you have room for 900 towards your debt each month.


Now this is where the SNOWBALL starts. Whatever EXTRA amount you have left over AFTER minimums are met, that goes towards your smallest debt. For this example the extra is 150 so I’m adding 150 onto the 50 min to Credit card 1.

So all the mins are being met for the larger ones- and I’ve increase the amount towards credit card #1 to 200.


I add in the Months, Calculation for Balance, and totals of all.

Total debt Calc = each spot where the balance will be — do the same for the paid towards debt but take it from the payment column!

Add the balance calc going down, and then grab the bottom right corner and drag it down. This copies the calculation down and will update for each row!

bal calc.JPG
pull down.JPG

Ok so logistics out of the way. This is what the snow ball would look like

&if you ever have extra a month you know exactly where to put it!!

cc 1.JPG

I think you get the gist of it! It for sure will keep you motivated and its nice to look at it! I also go a little excel crazy and like to make a graph to see the burn down :)

Another little trick to stay motivated is printing these coloring sheets, then filling them in as you pay! https://debtfreecharts.com/collections/free-charts

Have a great day!