How to Pay Off Debt Quickly With a Debt Snowball Calculator

Have you ever heard of the debt snowball method or a debt snowball calculator? These tools are both easy to implement and give you debt payoff motivation. Read on to learn how to start using these tools today:

Debt Snowball Method

This method was made famous by the great Dave Ramsey. So how does this method work? You tackle all debts one at a time by paying off the smallest balances first, and adding those monthly payments to the next debt in line. The reason this is such a great tool is that by paying off the smallest debts first, you get those quick “wins” that really boost your confidence to continue your debt-payoff journey.

Steps to the debt snowball:

1. Make a list of all of your debts: Name, total balance, and minimum monthly payment

2. Sort the list by smallest total balance to the largest total balance. Example:

– $200 credit card with a $25 minimum monthly payment
– $1,000 personal loan with a $50 minimum monthly payment
– $4,500 car loan with a $100 minimum monthly payment

3. Focus on the smallest debt first ($200 credit card). Make as high of a monthly payment as you can on this first debt (by sticking to your budget). Make the minimum monthly payments on all other debts. Example:

– Pay $40 per month on the credit card
– Pay $50 per month on the personal loan
– Pay $100 per month on the car loan

4. Once the credit card is paid off, take that monthly payment you were making ($40) and ADD it to the minimum monthly payment to the new smallest debt (the personal loan). Example:

– Pay $90 per month on the personal loan
– Pay $100 per month on the car loan

5. Continue this pattern until you pay off all of your debt!

Free Debt Snowball Calculator

If you have a large amount of debts to keep track of, a free debt snowball calculator can keep this practice efficient and organized for you. I personally use Undebt.It‘s free service to keep my snowball in order. Try it for yourself below:

Are you currently using the debt snowball method? I’d love to hear how it’s going! Feel free to leave your thoughts in the comment box!