The Snowball Method: What It Is and Why It Matters
The debt snowball method pays off debts from smallest balance to largest, regardless of interest rate. Once the smallest is eliminated, its payment rolls into the next — creating growing repayment momentum.
The method was popularised by Dave Ramsey. Its primary strength is psychological. You attack the smallest debt first with every spare dollar while making minimums on the rest.
With three debts — a $500 card at 19%, a $3,000 loan at 12%, and a $12,000 car loan at 6% — snowball targets the $500 first. That quick win creates confidence to tackle the next debt.
Studies from Kellogg School of Management found that people who focus on small balances first are more likely to stay on their plan and ultimately eliminate more total debt.
The trade-off: you'll likely pay more total interest than the avalanche method. But for people who've struggled with motivation or abandoned previous repayment plans, the psychological benefits often outweigh the cost.
The best debt repayment method is the one you'll actually stick to.
Richify Tip
Richify's AI agents model both snowball and avalanche methods against your specific debts — showing the exact timeline and total interest cost for each approach.
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