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The debt snowball method, step by step

The debt snowball is a simple repayment plan: pay the minimum on everything, throw every spare euro or pound at the smallest balance, then roll that payment onto the next debt. Here's exactly how to set it up, and when the avalanche method beats it.

Step 1: list every debt

Write down each balance, interest rate (APR) and minimum payment, including credit cards, store cards, overdrafts, car finance and personal loans.

Step 2: find your extra payment

Build a budget (our zero-based budget guide helps) and decide a fixed extra amount each month on top of all the minimums. Even a small amount gets things moving.

Step 3: order the list

• Snowball: smallest balance first.
• Avalanche: highest interest rate first.

Step 4: roll the payment forward

When the first debt is cleared, add its old minimum payment plus your extra to the next debt's minimum. Your monthly payment grows with each debt you clear, which is the "snowball".

Illustration of the rollover using an example €100 extra payment. Your total monthly payment never goes down, it just moves to the next debt.

Snowball or avalanche?

The avalanche always costs the same or less in interest. The snowball gives earlier wins, which helps many people stick with it. Read the full comparison in debt snowball vs avalanche.

Protect the plan

• Keep a small emergency fund so a surprise bill doesn't go back on a card.
• Stop adding new debt. Remove saved cards from shopping sites.
• If you are struggling with repayments, talk to your lender early and get free advice: MABS in Ireland, MoneyHelper or StepChange in the UK.

Not financial advice. These guides are general information for budgeting and planning, not financial, tax, legal or mortgage advice. Rules change and your situation is unique. Check official sources or a qualified adviser before you act.