God’s word encourages us to live debt-free lives – Romans 13:8 says that we should not leave any debt outstanding, and Proverbs 22:7 reminds us that borrowing makes us like slaves to our lenders. His word is also clear that when we borrow, we are responsible to repay every cent.

But when it comes to getting out of debt, taking the first step can feel overwhelming. It creates so much fear, anxiety and stress that we just want to ignore it. The problem is that it continues to add up with more debt and more interest. But we are here to help and to assure you that the process isn’t as scary as you may think.

The Debt Snowball Method takes away the stress of trying to create a plan on your own, and instead gives you a debt-payoff plan to save you time and money. It helps you steward your debt wisely by reducing the amount you pay in interest and increasing the speed at which you pay off your debt.

It works by paying off your smallest debt first. You continue to make minimum payments on all your debts, but you put any and all extra money towards your smallest payment. Once it’s paid off, you “rollover” what you were paying on that first debt, apply it towards your second debt until it is paid off, and so on, until you are debt-free! It tackles your debt one step at a time. The method is simple and easy to use. Sure, it will require discipline and commitment, but it is definitely worth the effort!

As you work to pay off your debt, it’s important to remember that you’ll be faced with challenges and temptations. That’s why you start with the smallest balance first, instead of the highest interest rate. Seeing an entire debt eliminated helps keep you motivated and excited for your next victory.

And getting started is simple! These easy-to-follow steps will help you create your plan to living a debt-free life:  

  1. Commit to stop borrowing. Just like you wouldn’t pour water into a bucket with holes in it, you can’t keep borrowing if you’re trying to get out of debt. Find some accountability and cut up your cards immediately!
  2. Start saving. A lack of savings is the number one reason people fall into debt in the first place. To get out of debt, and avoid accumulating more debt in the future, you need to save. Once you have an emergency fund, you won’t have to rely on those credit cards when something comes up. And it always does! Start with a goal of $1,000 (this is the first step on the Money Map).This way, when emergencies arise, you’ll have a nest egg to pull cash from and won’t ever have to rely on your credit card again (especially if you cut it up in step one).
  3. Make a budget. This step goes hand-in-hand with your saving and debt-elimination plan. You need to know how much money you’re bringing in and where it’s going. As you make your budget, consider what you can eliminate and how you can increase your income. Determine how much extra each month you can put towards paying off debt. The more, the better!
  4. Set priorities. The Debt Snowball method works for any kind of debt, but it helps to prioritize the types of debt you are going to focus on paying off. If you have credit card debt, start with that, then move on to your consumer debt (ie car loans, student loans, lines of credit), and then finally tackle your mortgage. (If you’re using the Debt Snowball method for your mortgage, enter only the principal and interest, not insurance and taxes.)
  5. Get organized. Once you have your plan for which debts you will start with, get all the necessary information to make your payoff plan. All you’ll need is:
    1. Names of your creditors (for your reference)
    2. Principal balances on all debts
    3. Interest rates on all debts
    4. Minimum payments on all debts
  6. Order your debts from smallest to largest balance. If you have two that are the same or close, put the one with the higher interest rate first. And remember, if you’re paying off credit card debt, consumer debt, and a mortgage, break them up. Start with your credit card debt, and eliminate it totally before moving on to your consumer debt, and finally your mortgage.
  7. Use the Debt Snowball Calculator. Good news! You don’t have to do any math to use this method! Enter the information from step 5 that you just collected for each debt. Be sure to enter the debts in order from smallest to largest, and add any extra payment amount from your budget. The more you can put towards your debt, the faster it will get paid off, and the more money you will save!
  8. Review your payoff plan. Once you’ve added all your information, the calculator will create an Accelerated Debt Payoff (ADP) plan for you. It will show you how much time and money you’ll save, and when you’ll make your last payment. Mark the dates on your calendar for each debt payoff and celebrate each milestone. Have your results emailed to you and print them off to keep them in a visible place to motivate you. You can play around with the extra payment amount and see how increasing it will save you more interest and more time!
  9. Implement the plan. You can start your journey to being debt-free today. Once you have your payoff plan, start attacking that first debt immediately.

It’s important to budget for the minimum payments you have right now. Since the minimum payment is a percentage, usually 1-2%, of your total principle, every time you make a payment, the minimum payment on your statement decreases. If you decrease your minimum payment every month, you won’t make as much progress. Instead, follow your plan! The calculator has done all the work for you.

Imagine all the freedom you’ll experience and memories you’ll make when you’re not stressed about your debt anymore!

Keep in mind that it’s normal to face frustrations and temptations along the way. When you do, or if you mess up, just adjust and keep going.

We are excited for you as you embark on your journey to living a debt-free life! And don’t worry, it may seem overwhelming, but we’ve got you covered with a mini-course that walks you through how to become (and stay) debt-free, step-by-step! Sign up for 5 Steps to Debt-Free Living mini course today!  It’s free!

Crown Financial Ministries is a 501c3 nonprofit organization supported by donor funding and product sales. Our mission is to train God’s followers to be good and faithful stewards in their personal finances and career. Read more about Crown’s ministry in action here.

Our team strives to provide high-quality, relevant content like these blogs and other free resources to help you on your journey to true financial freedom. If you have been helped or encouraged today, please consider supporting Crown’s ministry by making a donation.

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