Debt Snowball Method

What is Debt Snowball?

The debt snowball method, popularized by Dave Ramsey, is a debt payoff strategy in which you make minimum payments on all debts but direct all extra funds toward the account with the smallest balance. Once that account is paid off, you roll its payment into the next-smallest account, creating a growing "snowball" of payments. The psychological advantage — frequent small wins — helps maintain motivation. The mathematically optimal alternative, the debt avalanche, targets the highest interest rate first and typically costs less in total interest, but the snowball's behavioral benefits can make it more effective for some people.