Debt Snowball

Alot of people in the PF world have been talking alot about “snowballing” debt lately. I’m going to try to do my best to explain the process.

First, list all your debts, including amounts owed, credit limits, and interest rates. Don’t forget anything, make sure that you put it down a for a few days, just to make sure.

When you’re done listing them out, decide which you’d prefer to do, pay off small debts first or the highest interest rates first. The reason I say it this way is because, sometimes small victories to wonders for motivation. You can do a combination of both, but basically the way it works is, you pay as much as you can on one debt, while paying the minimum on all the others. When you pay off the first debt, you take the amount you were paying on it and apply it to the next debt in line. Lather, rinse and repeat.

I, personally, have never really used a snowball, but I have used the small victories theory in the past.

There are a number of spreadsheets available out there to help you organize your snowballing.

  1. Mr. Peanut’s Debt Snowball Calculator is a great one.
  2. Excel Spreadsheets found at

All you have to do is Google, “debt snowball spreadsheet”, and you’ll turn up free resources, as well as pay resources. You don’t have to pay for them, just like most things, you can do it for free.

Maybe some day I’ll explain why I’m so into personal finance.