How to Use the Debt Snowball Method to pay off Large Debt

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Ready to start the debt snowball method?  Make sure you grab your budgeting printables here.  There is a free printable debt snowball worksheet where you can list all of your debts in one place!

But first…Make sure you follow our Debt Free Journey on YouTube!

We are finally starting to make some progress with the debt snowball method!

It all started earlier this year, when we enrolled in Dave Ramsey’s Financial Peace University.

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    My husband and I were overwhelmed by our six figure debt, and had no idea where to start.

    We thought we were pretty frugal, and tried to stick to a “budget”.

    Our method of budgeting really just meant watching our money leave the bank account.  We had absolutely, no control over where our money went!

    After a year long struggle with post partum depression and anxiety, it was time to do something drastic…or prepare to lose everything!

    That’s when we got serious about budgeting, cutting our expenses, and paying off debt.

    We decided to followDave Ramsey’s Baby Steps, which include the debt snowball method to pay off debt fast!

    How to Use the Debt Snowball Method to Pay Off Debt Fast

    List All of Your Debts from Smallest to Largest

    Now is the time to face your fears, and add up all of your debt.

    You won’t be able to make progress, if you don’t know the exact number that you owe.

    This used to terrify me, but I found that once I knew the actual number, I was more motivated to create a debt payoff plan.

    Pull your credit report, gather all of the bills from your kitchen table, and sort them from smallest debt to largest debt.

    This is your debt snowball plan!

    Make sure you grab your budgeting printables here, to get your free printable debt snowball worksheet!

    RelatedHow to Make a Debt Free Vision Board

    Don’t Group Debt by Categories

    You might be tempted to lump “student loans” or “credit cards” into one section of your debt snowball.

    If I did that, I would have all of my little debts, and then BAM…a $363,000 student loan balance at the top of my debt snowball.

    That is super overwhelming!

    Your student loan balance is probably broken down into several small loans (unless you have refinanced them or something).

    Mine are broken down into 15 little loans!

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    Now I can put the $1,106 balance at the bottom of my debt snowball and knock it out fast.  I’ll leave that hefty $55K loan for later.

    Set Small Goals for Large Loans

    If for some reason you have a 363K loan, that’s not broken up into small chunks, you can set your own goals to stay motivated!

    Our debt snowball is quite large, and if I look at the total I get a little bit discouraged.

    I have a debt snowball tracker (which you can get in my printable library for free).  I use it to list ONLY the first 25K of our debt.  We are already half way to meeting that goal, and I feel super motivated and pumped!

    Set small goals and focus on those with intensity.

    When we do get to that 55K student loan debt, we will break it up into $2500 milestones.  Every time we hit 2500, we will celebrate by filling in our chart, and maybe going out for ice cream or something simple and fun like that.

    RelatedHow to Stay Motivated Paying Off Debt

    Make a Budget

    When my husband and I were ready to pay off debt, our excitement quickly turned to discouragement because our budgeting skills were less than perfect.

    In fact, we were horrible at budgeting!

    First, I would simply track our spending in a budgeting app.  I was watching our money leave, but definitely not telling it where to go.

    Next, my husband and I finally started working together on a budget for the house.  We did okay, but even after a year of trying to budget, we were still failing!

    We finally realized that our monthly expenses were just too high!  We never would have noticed this if we weren’t working together on the monthly budget.

    A budget allows you to tell your money exactly what to do each month.  You won’t be able to make steady progress on your debt snowball if you don’t have a budget!

    RelatedHow to Make a Budget for Beginners, Why Your Household Needs a Budget 

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      Cut Your Expenses

      Once you get your budget in order, you will be able to see where you can cut your expenses to put more cash to the debt snowball each month.

      When our budget finally started to come together, things like the cable bill, clothing, and entertainment, suddenly became less important to us.

      We were able to cut over ,000 of monthly budget expenses in order to put more to our debt snowball.  It sounds insane, but it will be worth it to get out of debt ASAP!

      Boost Your Income

      Have you cut your expenses as much as possible, but are still struggling to find enough to throw at your debt snowball?

      It might be time to get a side hustle, ask for a raise, or make that job change you’ve been thinking about to boost your income!

      Even though we have cut so much from our budget, we will still need to find more cash to throw at our debt snowball if we want to get out of this mess in the next 3 years.

      My husband and I are podiatrists and own a medical practice in Texas.  Our income potential is up to how hard we work, to get new patients in our office.  Now that we have cut the expenses at our business and at home to the bare minimum, any extra income we get will go on the debt snowball!

      Pay Minimum Payments (All Extra Goes to Debt)

      • Now that you have listed all of your debts from smallest to largest, you will pay the minimum payments on every debt, and chunk all extra money on the smallest debt until it is paid off.
      • Once the smallest debt is paid, you will roll that minimum payment plus all extra money into the next smallest debt until that one is paid.
      • As you move up the debt snowball, your payment amount will grow larger as the debts grow larger.
      • You will see progress faster with this method, which is why it is so motivating.

      Debt Snowball Exceptions

      Sometimes you will need to move a debt to the front of the debt snowball, no matter what the balance might be.

      We have IRS debt, and so that is the one we are working on now.

      Even though this debt is quite a bit larger than the first several loans on our debt snowball, we want to get this debt cleared up fast!

      The IRS can easily garnish your wages, and ruin your life.  You don’t want to mess with that!

      If you have any unpaid taxes, or an old debt that you are being sued for, just get it out of your life!

      These “scary” debts will need to be moved up to the front of your debt snowball.  If they are large, break it down into small goals (every $1,000 or every $50…whatever works for you!)

      Ignore Interest Rates

      I know it’s really hard to ignore interest rates in the debt snowball method, but just trust me!

      The math might not work, but math really isn’t the problem.

      If math was the problem, you wouldn’t have debt in the first place!

      Ignore interest rates when you are attacking your debt snowball and just work the plan.

      The point of the debt snowball method is to change your behavior, stay motivated, and see progress fast.

      The debt snowball method works because it breaks down an overwhelming task into small, manageable chunks.  Once you start to see progress on your smaller debts, you will become more motivated, and more hopeful that this is something you can really do!

      P.S.  Sign up for my newsletter for weekly motivation to pay off debt, and free budgeting printables to help you organize your finances!

      Leave a Reply

      1. The clearness in your post is just great
        and i could assume you are an expert on this subject.

      2. We did the Dave Ramsey program a few years back & paid off a lot of debt in 1 year. I was just wondering can you take his program & sell it? I thought when you take the class you have to sign that you won’t sell the information that you will tell people how to do it & share his program. You even named everything the same: snowball debt pay off, envelopes for cash. Is that okay? Just asking because I’m sure a lot of people would love to do what you are doing? If it’s okay that is awesome. I’m interested in knowing.

      3. Post

        Hi Blake! You definitely wouldn’t be able to take his exact program and reproduce it, but the debt snowball and cash envelopes are actually commonly used in several different financial programs. He does have a program where you can become a Ramsey Financial Coach and use his method to help others get out of debt. It’s a really great program and I definitely recommend it if you are interested in financial coaching! Blogging is a little bit different, I share my personal journey and mostly make money from ads, sponsorships, and selling printables in my shop which are fun ways to keep organized as you’re going through the baby steps. My main focus is helping families meal plan and save money grocery shopping to stay on budget 🙂


      hi! I'm shannon

      I’m a wife, mom of three, doctor, and blogger! In 2018, I decided to turn my mom blog, into a personal finance blog so others could follow along on our journey to pay off over HALF a MILLION dollars in student loan and practice start up debt. I hope you enjoy following along, and maybe even find some inspiration along the way.