Debt Snowball: What It Is and How to Use It to Pay Off Debt

Software and Mobile Apps That Help to Reduce Debt

hands wearing mittens holding large snowball
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The Debt Snowball method for paying down and getting rid of debt isn't about math as much as it's about motivation. Developed by Dave Ramsey, the popular personal finance author and radio and TV personality, the Debt Snowball plan calls for paying off your smallest debt first to give you a quick boost that should motivate you to pay off other, larger debts.

Before You Begin 

Before you start paying down your debts using this or any other method, you'll have to get organized. Gather statements for all your loans, including credit cards with balances and any other debts you have outstanding. Ramsey is not concerned with paying off mortgages in this plan, so whether you include that debt is up to you.

Ignore the interest rates when you're listing the debts. You're only concerned with the current balance on each debt. If two debts happen to have identical balances, you can use the interest rate as your guide and give that debt a higher priority.

Now put $1,000 into a savings account for emergencies. If you don't have $1,000 right now, save that amount up before you get started. Make minimum payments on your debts until you set aside this money. 

Here's How the Debt Snowball Works

Now it's time to get started. Make a list of your debts from the smallest to largest. The smallest one should be at the top of the list. Keep making minimum payments on all your debts except for this one, the one with the smallest balance at the top of the list. Make more than the minimum payment on this one, even a double payment if you can to manage it. 

Repeat this process each month until that debt with the smallest balance is paid off. Now focus on the next debt on your list. Take the amount you were paying on the first debt and put it toward the second one, using that plus the second debt's minimum payment as your monthly payment amount.

You see where this is going now. When the second debt is paid off, you'll use those funds to pay down the third debt along with that debt's minimum payment.

Debt Snowball Software and Apps

It may help you to use software or a mobile app to support your debt reduction efforts. Here are a few suggestions that use the Debt Snowball method. These tech tools will not only sort your debts for you, but they'll also give you details on interest savings​ when you can expect to pay off loans and other debts, and other perks that can help keep you motivated toward becoming debt-free.

For a detailed example of how one person used the Debt Snowball method of eliminating debt, read Get Out of Debt With a Debt Snowball.