Got a Mountain of Debt? Crush it One Snowball at a Time Using This Method

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Debt snowball
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How do you even begin paying down a mountain of debt from tons of sources?

Two major schools of thought dominate the debt-repayment sphere.

One says pay off debts with the highest interest rate first. That’s called the debt avalanche method, and we’ll talk more about it another time.

The other says pay off your smallest balances first so you can enjoy quicker victories and build confidence. That’s called the debt snowball method. That’s what I’m talking about now.

What is the Debt Snowball Method?

Pioneered by money guru Dave Ramsey, the debt snowball refers to paying off one credit card or loan at a time, starting with the smallest balance first. Perfect for instant gratification; not so good for interest long term.

Smart finance experts will tell you sitting on credit card debt with high interest is stupid. The longer it’s unpaid, the more it will cost you.

So why would you pay off smaller balances and let those interest mongers sit?

Because, dude, paying down debt is hard.

When you stare at your credit report and see a list of lenders and credit card companies staring back at you, it’s like that time you panicked during Red Rover in second grade, froze, wet your pants and ruined recess. (Oh, doesn’t everyone have that memory?)

It’s hard to take the first step. Especially when reaching your destination means a bully might clothesline you.

Why Use the Debt Snowball Method

The debt snowball method helps you take the first step. And the next, and the one after that.

Wouldn’t Red Rover have been more pleasant if you’d gotten a few practice runs against a couple of the weakest kids in class before taking on the toughest? It’s kinda like that.

Pay down your smallest balance aggressively. Once it’s gone, you’re like, “Hey! I can do this.”

Then you focus on the next-smallest debt with more confidence. It’s paid off, and you’re like, “Oh my god, I’m a debt-slaying goddess.”

The downside is your bigger debts will accrue interest while you pay off the smaller ones, and it could cost you more in the long run.

But it’s definitely more effective than standing motionless at the foot of a mountain of debt in wet pants.

Your Turn: What tricks have you used to tackle credit card debt?

Dana Sitar (@danasitar) is a senior writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).