Does Dave Ramsey’s Debt Snowball Method Work?

The Debt Snowball method, popularized by Ramsey, is a debt reduction strategy that prioritizes debts by their size, starting with the smallest.

The idea is simple. Make extra payments on your smallest debt to get rid of it, then apply that same payment to the second small debt, and so on.

The biggest problem with the Debt Snowball method is how debts are prioritized. Instead of ordering debts by interest rate, debts are ordered by their size. This means you’ll likely pay more in interest using this method.

Does The Debt Snowball Method Work

If you're curious, the Debt Avalanche method prioritizes debts by interest rate, not size. The avalanche method might work best if you want to reduce interest payments.

“The point of the debt snowball is behavior change,” Ramsey said on his website. “If you try to pay off your student loan first because it's the largest debt, you won't see results for a long time.”

The snowball method makes debt elimination easier because you will see progress much faster. Knocking out your smallest debt is more straightforward than tackling your largest. Those smaller wins may keep you motivated to continue paying off your debts.

Many people use the snowball method to get out of debt. But you will be paying more in interest before getting there.

“The truth about the debt snowball method is it’s a motivational program that can work at eliminating debt, but it’s going to cost you more money and time – sometimes a lot more money and a lot more time – than other debt-relief options” argues

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