1 of 7

LESSON 1 · Escape the Debt Trap

Smallest First

The debt snowball is dead simple: list every debt from smallest balance to largest. Make minimum payments on everything except the smallest debt. Throw every extra dollar at that smallest balance until it's gone. Then take that entire payment and roll it into the next smallest. Repeat until debt-free.

Paying off the highest-interest debt first (the avalanche method) saves more money. But humans aren't calculators. Dave Ramsey popularized the snowball because it works with your psychology, not against it.