How Does Debt Snowball Work?

by Joe Plemon on July 7, 2009

Q: I understand that you recommend a Debt Snowball to help people get out of debt. Could you explain how this works?

A: Sure, but let me preface this by saying that unless you are ready to make radical changes in your life, the Debt Snowball or any other technique to reduce debt is not going to work. You must be so disgusted with debt that you are willing to make huge sacrifices. Getting out of debt is much like losing weight; making small adjustments just doesn’t get the job done. Changing your habits and behavior does. Because “normal” in America is broke, your challenge is to be weird.

Going Radical

Now, if you are ready to be radically weird, allow me to explain the debt snowball. Start by listing all of your debts from smallest to largest. Make minimum payments on all debts except the smallest and attack it with a vengeance. “Where will this money come from?” you might be asking. Good question. It is essential that you have a written cash flow plan (budget) so you will can track all of your income and outgo. Scrutinize this budget and cut anything not essential from it so you can create as much cash flow as possible. Every extra dollar will make the snowball roll faster.

Go Small Before You Go Big

Once that smallest debt is paid off, focus on the next smallest, making the same payment you had been making on the smallest debt plus the minimum payment you had already been making on the second smallest. Pay it off and work your way down the list. As each debt disappears you are able to pay increasingly larger payments on the next one. Stick this list on your refrigerator and draw a huge red line through each debt as it disappears.

Celebrate Your Progress

Go ahead and celebrate as each debt disappears. You will be encouraged as you plot your progress and you will gain momentum as you get closer to your goal. Most families can be debt free (except for your house) in 18-24 months by using the debt snowball! Imagine the freedom you would feel if you had no debt! The debt snowball has worked for millions of people and it can work for you.

Are you ready to be weird? Are you willing to sacrifice today so you can win tomorrow? Then get started…today! Your life will never be the same.


{ 3 comments… read them below or add one }

Damon Day July 16, 2009 at 5:45 am

Hey Joe,
I stumbled across your website from the money hacks Carnival. I was actually about to submit an article I wrote last month on how the debt snowball works :-). I decided to check out the latest edition and of course your post caught my eye.

I guess I will be submitting a different post for next week. I am new to this whole blogging thing myself and just starting to learn about these blog carnivals. I will tell you what, finance is easy compared to this whole new blogging language I am trying to figure out.

Between carnivals, article submissions, back links, do follow, no follow, link juice etc. I feel like I need to go back to school 🙂

I follow Dave Ramsey myself and it looks like your blog is off to a great start. Keep up the good work.


Joe Plemon July 16, 2009 at 7:12 am


Thanks for the encouragement. And you are absolutely right about learning this blogging language. Personal finance is MUCH simpler!


Debt Lawyer September 18, 2010 at 3:37 am

I liked that comparison of getting out of debt with the experience of loosing weight. It’s indeed a good comparison.As anyone gradually begins to move towards getting free from debts, he feels that tons of weight on his shoulders have been removed, and his mind and soul seems to become lighter then ever.


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