Debt is a Four Letter Word

Debt is the proverbial thorn in the side for many Americans. It comes in the form of looming student loans, rising credit card balances and more. Those burdened with this long-term debt are looking for some relief and a solution. Luckily, there’s the trusty Debt-Snowball Method.

The Debt-Snowball Method is a strategy anyone can implement and doesn’t take a degree in finance to understand. It helps you melt debt by paying off your smallest balance first, then rolling the payment into the next largest debt and so on.

Here's how it works:

  1. List your debts in order from the smallest to largest balance. Just look at the total amount that you owe, not the interest rate.

  2. Budget to pay the minimum payment on every balance except the smallest one. 

  3. Determine how much extra above the minimum payment you can pay on the smallest balance, then pay this amount each month until that balance is paid off. 

  4. Once that balance is paid off, roll that payment amount into the next smallest debt's payment. 

  5. Repeat until you pay the largest balance in full.

Although you may not pay debt with the highest interest rate first, as some financial experts recommend, the Debt-Snowball Method can motivate you to pay off debt faster when you see results sooner. If you really want to speed up the process, add extra money to the payment amount with each new “snowball”.  

Local financial institutions like Credit Union West understand the frustration many people have about overcoming their debt. They provide products and services geared toward educating and empowering their members to make sound financial decisions. Visit to learn what makes them a trustworthy financial partner.

contributed by: Credit Union West