How to use the Debt Snowball Method

If you're feeling overwhelmed by multiple debts, you're not alone – and you're not powerless either. One place to start might be with the popular debt snowball method. It’s a simple, practical way to tackle what you owe, one step at a time.It’s straightforward, motivating, and perfect for those who want to see progress quickly.

 In this guide, we’ll explain how the debt snowball works, walk you through it step by step, and show how it might fit into a wider financial strategy – especially if you’ve got unexpected costs or need some breathing room.

In this guide:

• What is the debt snowball method?
• How does the snowball method of paying off debt work?
• Why choose the debt snowball method?
• When short-term loans fit in (and when they don’t)
• Real-life example: Snowballing debt in action
• Is the snowball method right for you?
• Where to start with the debt snowball method
• The bottom line…
  

What’s the debt snowball method?

Think of it like rolling a snowball downhill. You start small, then build up momentum as you go.

The debt snowball method focuses on paying off your smallest debt first, while keeping up minimum payments on all your other debts. Once the smallest debt is cleared, you’ll move to the next smallest, and so on – building up a ‘snowball’ of progress and motivation.

It’s not about maths. It’s about mindset. For many people, seeing that first balance drop all the way to zero can be a huge boost. It can help keep you on track while saving you from feeling overwhelmed.

How does the snowball method of paying off debt work?

Let’s take a closer look at each step of the debt snowball method.

1. List your debts from smallest to largest

Don’t worry about interest rates just yet. With the snowball method, the size of your debt matters most, rather than the cost. Write down all your unsecured debts (like credit cards, overdrafts, store cards and short-term loans), starting with the one you owe the least on.

2. Keep paying the minimum repayment for all your debts

This keeps everything ticking over and helps you to avoid missed repayments or extra fees, which could undermine your efforts and potentially impact your credit score.

3. Put any extra cash towards the smallest debt

Throw everything you can at that smallest balance. Even if it’s just an extra £25 a month, it all helps. You’ll keep paying the minimum repayment on everything else – but put any extra towards that first, smallest debt.

4. Once it’s paid off, move to the next smallest

The moment you clear the first debt – celebrate! Then, roll the amount you were paying into the next one. This is the snowball effect in action. Every time you pay off a debt, your repayment power grows.

5. Repeat until you’re debt-free

Keep the momentum going. You’re training your brain to win, and each step gets you that bit closer to financial freedom.

Why choose the debt snowball method?

Here’s why so many people choose the debt snowball approach:

• Quick wins boost motivation: You see results faster, which helps you stay on track for the long term.
• It’s simple and structured: You know exactly what you’re doing, and what happens next.
• You stay in control: You’re not juggling multiple repayment plans or confusing interest rates.

Of course, it’s not the only method to manage debt. Some people prefer the debt avalanche, which tackles the highest interest first. That might save more money overall – but for many, it can be harder to stick to.

Where short-term loans might fit in (and where they don’t)

When used carefully, a short-term loan could help you cope with sudden, emergency costs while you’re snowballing debt. For example:

• Your car breaks down and you need it for work
• You’ve almost cleared one debt, but an urgent or unexpected expense throws off your plan
• A one-off payment could help you avoid bigger fees or penalties

That’s where a responsible lender like Moneyboat can help. We offer fair and flexible short-term loans with clear terms, no hidden fees and competitive rates – so you always know where you stand.

But borrowing more money isn’t always the right answer. If your debts feel unmanageable, or you’re relying on credit to cover everyday costs, speak to a debt charity such as StepChange first.

You can find more useful information about how loans and debt management plans work together in our helpful blog.

Real-life example: Snowballing debt in action

To bring the debt snowball method to life, here’s an example of how it might work in reality.

• You owe £250 on a catalogue account (minimum repayment: £25)
• £650 on a store credit card (minimum repayment: £35)
• £1,200 on a regular credit card (minimum repayment: £60)

You’ve got an extra £50 in your monthly budget.

Here’s what snowballing might look like:

Month 1-3:

• Pay £75 (£25 minimum repayment + £50 extra) to the catalogue account
• Pay the minimum repayment on the others

By month 4, the £250 catalogue account credit is cleared. Now, take that £75 and roll it into the next debt:

Month 4-10:

• Pay £110 (£35 minimum repayment + £75 extra) to the store card
• Pay the minimum repayment on your other credit debt

Then, repeat with the last debt, now using £170 total. Momentum builds. You’re in charge.

Is the snowball method right for you?

The snowball debt method could be ideal if you:

• Like to see quick progress
• Feel overwhelmed by lots of small debts
• Want a simple, no-fuss plan
• Are self-motivated and ready to start

It might not be ideal if your high-interest debts are also your largest. In that case, you might want to look at an avalanche method or debt consolidation. Either way, what matters most is doing something about your debt. Any plan is better than no plan.

Where to start with the debt snowball method

Here are a few steps to get going with the snowball method of paying off debt:

1. Review your monthly budget (our guide on personal cash flow budgeting might help)
2. Work out how much extra money you can realistically spare every month
3. Make a list of all your debts
4. Commit to the process – and then stick with it

If you're not sure where to begin, our guide on financial wellbeing tips has some helpful pointers for taking charge of your finances and planning for the future.

The bottom line…

The debt snowball method is a simple way to tackle your credit debt, with all the potential to be powerful and motivating. If you want to take control of your debts without getting lost in complex calculations around interest, APRs and more, it could be an effective way to start paying off what you owe for good. By focusing on your smallest debt first, and building up from there, you create a real sense of progress. And that feeling can carry you all the way to being debt-free.

Remember:

• It’s not about being perfect – it’s about getting started
• Quick wins matter more than you think
• You have options, and you’re not alone

Looking for more independent help and advice? There’s always someone to turn to for guidance. Contact third-party organisations such as Citizens Advice, and MoneyHelper for free debt support.