0,00 ₹

No products in the basket.

Debt snowball method: Guide To Be Debt Free

Who does not want to get rid of their debts? 

A debt-free life is what each of us aspires to! 

Isn’t it?

Well, paying off debts is not merely the one-night thing. It takes time to build up the strategy and its implementation. 

Let me introduce you to the ‘Debt Snowball Method,’ which is more like a smart strategy, popularly given by the famous businessman, author, radio show host, and a finance guru Dave Ramsey.

A Glimpse of the Debt snowball method:

Knock out a small debt first, so you get a quick win. Momentum is Key.  -Dave Ramsey

Basically, this is the strategy that reduces the debts. Start with paying off the little debts first and go in ascending order for the same. Afterward, you will get momentum by the time you start knocking down the small debts. Once you start clearing debt after debt, start rolling the money you create by crushing each debt and paying off the next significant debts. This is the ultimate method to get debt-free and achieve financial peace.

“Dave Ramsey” believes that hope has more to do with you winning money than math, while he himself is a math and finance enthusiast. The debt snowball is the metaphoric concept. Here, hope gives you what’s fuel on the fire, a reason to make changes, a reason to do something you have never done before. Your personal finance is 80% behavior, and it’s only 20% head knowledge. It’s not the problem of math; instead, it’s you who is responsible for this. Moreover, it deals with personal finance and behavior. 

For better understanding, you can refer to this video:

Now understand how does the method works:

  • Initially, you should identify your smallest debts and make a list in ascending order of all your debts. 


Credit Card debt= Least Payment of 2000 (1,00,000; total payment),

Car Loan= Least Payment of 3500 (3,00,000rs; total payment),

Education Loan = Least Payment of 4000 (4,00,000rs; total payment),

House Loan= Least Payment of 8000 (10,00,000rs; total payment).

Here, you can see that the debts are written in ascending order.

Related: How To Build An Emergency Fund. Personal Finance Guide

  1. Start paying the minimum of balance which you are willing to pay to all the debts, and at your smallest debt, try to pay as much as you can.
  2. The next step will be started once you pay off the small debt fully. As you are free from the previous debt, so take that balance you were paying on the last debt every month and use it in the next smallest debt payment. The balance you should add on to the minimum payment that you were paying formerly.
  3. Keep consistent in the process of crushing debt after debt until you will get free from all your debts.
  4. Ultimately your money will grow too once you pay off your debt.

Let me show you an example with a precise table:

S.N Name of Debts Total Amount Payable Least Payment New Payment
1 Credit Card Debt 1,00,000 2000 2000
2 Car Loan 3,00,000 3500 5500 (3500 + 2000)
3 Education Loan 4,00,000 4000 9500 (4000+5500)  
4 House Loan 10,00,000 8000  17,500 (8000+9500)
TOTAL 18,00,000 17,500 34,500

Is it the fastest way to get rid of the debts?

This is how the debt snowball method works. Once you are consistent with it, you will get rid of your debts soon for sure. 

Related: Assessment of Your Financial Fitness

As per the approach of the method, I am quite convinced it is indeed one of the easiest and fastest ways to get rid of the debts. 

Paying off your more enormous debts first on top of higher interest would require huge savings. Thus, it doesn’t make sense straight away. If you start with paying your little debts first and once you paid off, you can use that balance for the next smallest debt. It would require moderate savings which you could easily be able to save. And when you start getting debt-free quickly, it gives you motivation and satisfaction that will lead you to clear your remaining debts as soon as possible.

Is there any logical reason that proves it will be going to work? 

When you do something with consistency over time, you will see results! -Dave Ramsey

Definitely, it will be going to work. As it is something that relies on the person’s behavior. There is no relation to math, as hope is the key. 

Let me tell you when you first start paying off your most massive debts with big interests you will undoubtedly be left with the least savings or no savings (then how you will clear your next debt), which is somehow a bit frustrating and demotivating. But with the least or moderate savings when you pay off the smallest debts and once it is fully paid you will be like, “Ah! it works.” Ultimately you feel filled with hope (to keep on crushing the next smallest debt) and internally motivated. Motivation is something that comes from inside that will push you to keep consistent towards your next ultimate target of crushing the debts. Once you are consistent and determined, nothing could stop you from becoming debt-free soon. 

Summing up!

At last, I want to say that it will only work when you plan everything in a synchronized way. Proper planning should be written down at the initial stage and further the appropriate implementation. And have some backup plans too. 

When you feel hopeful and motivated, you will be consistent with the process. But in case of any unfortunate reason you feel like giving up, then you need some advice from the intellect mindset people who could motivate you and help you out. So keep in touch with them and surround yourself with such people. This method is well-tested, successful, and implemented by plenty of people. The only person who can be the boss is you itself and not let debts rule on you. 

If I would say it in short:

  1. Get up
  2. Make precise plans, 
  3. Implement it properly
  4. Stay hopeful and motivated
  5. Keep Consistent
  6. Once you get rid of your debts
  7. Now you are the boss
  8. Bang on! Rule you! Peace

Also Check

Ayushi Sinha
Ayushi Sinha
Ayushi is free-spirited, a learner, listener, observer, nature, and wildlife enthusiast. She has experience working as a Research Analyst and Content Writer. She loves singing, creative writing, reading, arts, cooking, and exploring places. She believes hard work through smart ways is more important than talent as you can't master your talent unless and until you work on it. She is adaptable, way determined, and positive towards her work.

Related Articles