Debt Snowball Calculator Spreadsheet

What Is the Debt Snowball?

The debt snowball is a debt payoff method where you pay your debts from smallest to largest, regardless of the interest rate. Knock out the smallest debt first. Then, take what you were paying on that debt and add it to the payment of your next smallest debt. 

Why a snowball? Because just like a snowball rolling downhill, paying off debt is all about momentum. With every debt you pay off, you gain speed until you’re an unstoppable, debt-crushing force.

Here’s how the debt snowball works:

Step 1: List your debts from smallest to largest regardless of the interest rate.

Step 2: Make minimum payments on all your debts except the smallest.

Step 3: Pay as much as possible on your smallest debt.

Step 4: Repeat until each debt is paid in full.

What happens then? Freedom. No more payments. No more answering to collectors. No more watching your paychecks disappear.

Because when you get hyper-focused and start chucking every dollar you can at your debt, you'll see how much faster you can pay it all off. Sorry, minimum payments. You're just not good enough.

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An Example of the Debt Snowball

Say you have four debts:

  1. $500 medical bill—$50 payment

  2. $2,500 credit card debt—$63 payment

  3. $7,000 car loan—$135 payment

  4. $10,000 student loan—$96 payment

Using the debt snowball method, you would make minimum payments on everything except the medical bill. But let’s say you have an extra $500 each month because you took a side job and cut your expenses down to the bare minimum. You are gazelle intense.

Since you’re paying $550 a month on the medical bill (the $50 payment plus the extra $500), that debt will be gone in one month. Then, you can take the freed-up $550 and attack the credit card debt, paying a total of $613 ($550 plus the $63 minimum payment). In about four months, you’ll wave goodbye to that credit card. You’ve paid it off!

Now, punch that car loan in the face to the tune of $748 a month. In 10 months, it’ll drive off into the sunset. Now you’re on fire!

By the time you reach the student loan—which is your biggest debt—you can put $844 a month toward it. That means it will only last about 12 months. After that, Sallie Mae better get used to living somewhere else, because you’ve kicked her out!

Thanks to your hard work and sacrifice, you have paid off $20,000 of debt in only 27 months using the debt snowball method! You’re a rock star! 

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