If you’re lost in a sea of debt and you can’t breathe, the debt snowball is a strategy to get your head above water. It isn’t the fastest or the cheapest but the psychology is powerful and it will propel you forward.

Picture this: Scooby and Shaggy are fleeing the abominable snowman down a ski slope. Tumbling down, getting rounder and rounder with every rotation. When they crash to the bottom, they’re completely encased in a giant snowball, along with the yeti. Stuck in the ball, the rest of the gang unmasks the villain, exposing old Mr. Greenway and foiling his gem smuggling operation. Both are treated to Scooby Snacks and promptly become lighter than air.

This debt snowball is a great name. In every episode of Scooby Doo, Where Are You? Scooby and the gang are called to investigate a supernatural crime scene and apprehend the monster that’s been terrorizing their clients. They set intricate traps to capture the supernatural criminals, and fail miserably. More often than not, they snag themselves before the monster. This is great imagery for the debt snowball. It’s not until the gang’s plans fall apart, and the dynamic duo get to their shenanigans, that they succeed in capturing the yeti.

And the debt snowball works just as effectively to help apprehend monstrous debt. Sometimes you just have to be you, and roll with it.

The Debt Snowball Strategy

The debt snowball is the most popular debt strategy in the world. The debt snowball is most useful if you have several debts of varying size and interest rates. It’s a simple method, you just pay down your debts one at a time, starting with the smallest.

The debt snowball is a great solution to villainous amounts. With the debt snowball the results feel more tangible. You’ll start with a list of debts and see them drop away one by one. That’s why the debt snowball is so effective and popular. Racking up small wins gives you an invaluable sense of progress. Scooby Snacks.

Try it out yourself.

How to Use the Debt Snowball Strategy

Here are the steps to get started:

• List all of your debts by name and balance. For example: “Capital One – $1,500.”
• Put them in order from lowest balance to highest balance.
• Attack the lowest balance with everything you got. Pay the minimum monthly payment on all of your debts then use any money left over towards the lowest balance on your list.
• Once you pay off the first lowest debt, start attacking the next lowest on your list.
• Continue through the list until you’re debt free.

The Debt Snowball Method Isn’t the Fastest or Cheapest

That’s right, the debt snowball is slower and more expensive than other debt methods. The debt snowball is effective, but just like any other simple pleasure, the debt snowball comes at a cost. In exchange for all of the gratifying and motivating personal finance experience, you keep your debt around for just a bit longer. Just a bit, but it’s enough for the accumulation of interest to be worth careful consideration.

The debt snowball has one mortal flaw: it doesn’t account for the different interest rates of debts. Technically, the fastest and cheapest way to pay off debt to is pay of the debt’s with the highest interest rates first. If you order your list this way, you’ll pay off debts faster and cheaper. This strategy has a name: the Debt Avalanche.

The Debt Avalanche

The second most popular debt strategy on the internet is the debt avalanche. And it looks a lot like the snowball’s evil twin. They have a similar structure, but they are on opposite sides of the coin. Both strategies execute the minimum payments to all debts, but the avalanche focuses down debt with the highest interest rate rather than the lowest balance. Where the snowball uses your emotions to keep you invested in the elimination of your debt, the avalanche crunches cold hard numbers to take you where you need to be, ASAP.

Although the debt avalanche is less popular in online discussion, fans believe it’s the vastly superior strategy. It’s hard to argue with the chunk of change you can save with the avalanche, but since most snowballers wouldn’t see that money anyway it’s a bit of a moot point.

The people who prefer the debt avalanche aren’t wrong. You do end up spending a lot more on interest while using the debt snowball, but they are missing a key takeaway. The debt snowball isn’t popular because of its efficiency. It’s popular because it gives people motivation to pay off their debts they didn’t have before. The difference in interest is just the fare to ride the snowball.

The Psychology is Powerful

Debt is one of the most oppressive forces in society, and it can seem insurmountable. The escape from debt is one of the most liberating experiences there is. You should use the debt strategy that is most likely to be successful for you. If you understand yourself well, and are honest enough, you shouldn’t be ashamed of using an “inefficient” strategy. After all, getting out of debt is about more than just resolving your current situation. It’s about moving forward with the knowledge and habits necessary to keep undesirable debt at bay.