Definition
A method of paying off debt by tackling the smallest balances first, which builds momentum and motivation as you eliminate each debt.
What to consider
- Start by paying off your smallest debts first for quick wins.
- Each cleared debt boosts your motivation to tackle the next.
- Keep the momentum going by tracking your progress.
Real world scenarios
- Leo starts with his smallest credit card debt and pays it off quickly for a motivational boost, then moves to larger loans.
- Each time Paige clears one balance, she redirects that monthly payment amount to the next debt, watching her progress build momentum.
- As the snowball method reduces the number of debts, Tia feels her financial stress subside, celebrating each victory.
Related terms
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