Create a Debt Snowball
The Money Class You Never Got in School
What Is a Debt Snowball?
A debt snowball is a strategy where you list your debts from smallest to largest, pay minimums on everything, and throw any extra money at the smallest one first. Once that’s paid off, you roll its payment into the next debt—and so on.
Step 1: List Your Debts in Excel
Create a simple table like this in Excel (or Google Sheets):
| Debt | Balance | Interest Rate | Minimum Payment | Status |
|---|---|---|---|---|
| Credit Card A | $500 | 22% | $30 | Target First |
| Student Loan | $8,000 | 5% | $90 | Pay Minimum |
| Car Loan | $12,500 | 6% | $250 | Pay Minimum |
Sort the debts from smallest balance to largest. That’s your snowball order.
Step 2: Add an “Extra Payment” Column
Next to your minimums, add a column for any extra money you can put toward the smallest debt each month (even if it’s just $25).
When the first debt is paid off, take that entire payment and apply it to the next debt’s minimum. That’s the snowball effect in action.
Step 3: Track It Monthly
Add rows under each debt to track your monthly progress. You can create formulas in Excel to help calculate payoff time:
=IF(B2>0, B2 - (C2 + D2), 0)Where B2 = current balance, C2 = minimum payment, D2 = extra payment
Update this each month to see how your balance drops and when you’ll hit zero.
Step 4: Stay Focused
The hardest part of paying off debt is sticking with it. That’s why the snowball method works—it gives you small, fast wins that build confidence.
If you’re visual, try using a progress bar or pie chart in Excel to see your payoff progress.
Bonus Tip: Use Found Money
- Tax refunds
- Side hustle income
- Cash-back rewards
- Raises or bonuses
Apply these directly to your snowball and speed up the timeline.
Want to Track Your Full Budget Too?
Use YNAB (You Need a Budget) to connect your bank accounts, build a debt plan, and keep your entire financial picture in one place.
Try YNAB free with my link here
You’re in MoneyMode now. Whether you’re tackling $500 or $50,000—one snowball at a time, you’ve got this.
