Debt Snowball: A Financial Coach’s Perspective

Paying off debt can feel overwhelming, especially when you’re juggling multiple balances and trying to stretch every paycheck. If this sounds familiar, you’re not alone. In fact, nearly 6 in 10 Americans are living paycheck to paycheck.

Many people ask our TrustPlus financial coaches the exact same question: “What’s the best way to pay off my debt?”

The honest answer is: it depends. There isn’t one strategy that works for everyone.

The best debt repayment plan is the one that meets your needs and helps you stay on track. That said, one of the most popular and successful strategies is called the Debt Snowball Method.

Let’s break it down and see how it works.

The Debt Snowball method helps you pay off debt by focusing on your smallest debt first while making minimum payments on the rest. While it might not save the most money on interest, TrustPlus coaches recommend it because early wins give you a quick boost of confidence, helping you stay motivated to wipe out your debt for good.

What Is the Debt Snowball Method?

The Debt Snowball Method focuses on getting quick, simple wins so you stay motivated and pay off your debts. Here is the step-by-step process.

1. List all of your debts: While interest rates are important, the Debt Snowball Method focuses on the total balance of each debt when deciding the order to pay them off. Start by listing each debt from the smallest balance to the largest.
2. Pay the minimums: Continue making the minimum payment on every debt so your accounts remain in good standing with your creditors. Also, avoid adding new purchases to these accounts whenever possible. If you have automatic payments linked to a credit card, consider switching them to your debit card or bank account instead. If that’s not possible, be sure to pay both the minimum payment and any new charges so your balance doesn’t continue to grow.
3. Attack the smallest debt first: Put any extra money toward the smallest balance, no matter how little it may be. Not sure where to find this extra money? Check out our How to Pay Off Debt on a Low Income free guide for practical steps you can take.
4. “Snowball” your payments: Once the smallest debt is paid off, take the money you were paying toward it and add it to your next-smallest debt.

Each time you pay off a debt, the amount of money you have to pay down the next one grows larger and faster, like a snowball rolling down a hill.

Use our free TrustPlus Debt Snowball Calculator below by entering your own balances to see how the Debt Snowball Method could work for your situation.

Why Do TrustPlus Financial Coaches Like the Debt Snowball Method?

One of the biggest challenges TrustPlus financial coaches see isn’t getting people motivated to pay off debt; it’s helping them stay the course. Many clients start with the best intentions but become discouraged when they’re making payments every month and don’t feel like they’re making progress. The Debt Snowball Method helps create visible wins that can make it easier to stick with your plan over time.

Paying off a smaller balance early gives you a visible win. That success can help cut down on financial anxiety and build the confidence to make it easier to stay on track with your long-term debt reduction goals. For many working households, that feeling of progress is just what they need to get out of debt.

Common Mistakes to Avoid

TrustPlus financial coaches often see a few common mistakes:

• Adding new debt: It is very hard to make progress when you’re still using credit cards to make ends meet. Check out our free guide How to Stop Living Paycheck to Paycheck for practical steps on making every dollar go the extra mile.
• Forgetting other minimum payments: It’s important to continue to continue making the minimum payment on all your debts to ensure they remain in good standing with your creditors.
• Comparing your progress to someone else’s. Remember, this isn’t a race. As long as the Debt Snowball Method fits your needs, stick with it.

Unsure if the Debt Snowball Method is the right debt reduction strategy for you? Book a free session with a TrustPlus financial coach to explore your options.

You Don’t Have to Do This Alone

While the Debt Snowball Method works incredibly well for a lot of people, it is not your only option. Every financial situation is different, and sometimes it helps to talk to a real person to figure out what makes the most sense for your life.

Read our guide: What Is Financial Coaching? to see how a free TrustPlus financial coach can help you review your debts, understand your options, and decide whether the Debt Snowball Method (or another approach) makes the most sense for your goals.

Frequently Asked Questions

Is TrustPlus financial coaching really free?

Yes. TrustPlus is offered at no cost to you. You’ll work one-on-one with a real human financial coach who is focused entirely on your unique personal goals. They work for Neighborhood Trust Financial Partners, a nonprofit with over 20 years of experience helping working Americans achieve their financial goals.

Can I use the Debt Snowball Method even if I’m living paycheck to paychecK?

Yes. Absolutely! That said, what’s more important is to determine whether this strategy makes sense for your situation. Talk to a free TrustPlus financial coach to explore your options and find the right plan for you.

What if I have too much debt to pay off?

If your debt feels overwhelming, don’t assume you’re out of options. You’re also not alone. TrustPlus financial coaches can review your finances, explain your options, and help you create a realistic plan. Book a free session to get started.