Clear your debt with the snowball method — here’s how 💪

3 min readMar 29, 2022

In 2021, on average, South Africans were spending 75% of their take-home pay on debt. That’s a scary statistic. If you’re one of those people, whose debt repayments are building into a mountain that seems impossible to climb, then read on. There are smart strategies to reduce your debt and ultimately become debt-free.

This month we’re discussing one of those strategies — the snowball method.

How does it work?

You start by paying off the smallest debt first. Once that debt has been cleared (sigh of relief), you take the amount you were paying and use it to pay off the next-smallest debt.

This doesn’t mean you’re not paying off bigger loans (you still have to make the minimum repayments on all your outstanding debts), but as smaller debts clear, you have more spare cash to pay off the next debt in line. Your debt-clearing campaign will gather momentum like a snowball rolling down a hill, getting bigger as it goes. If you remain focused, it’s one of the most efficient ways to become debt-free.

As easy as 1–2–3

Step 1: Make a list of every debt you have, what you currently owe on each, plus the minimum monthly repayments and due dates.

Step 2: Rearrange the list according to amounts owed, from smallest to biggest.

Step 3: Calculate how much extra you can put toward your smallest debt after you’ve made the minimum monthly repayments on all your debts. Pay off the smallest debt and when it’s gone, use that money to tackle the next one.

Where it becomes difficult…

Let’s say you’re paying R500 towards a store account each month. You finally pay off the entire account and now you have R500 free… But if you’re using the snowball method, that R500 is actually not free because you have to use it to start paying off the next debt instead of spending it on something else.

This can be discouraging. But remember: paying off your debt will increase your financial security, improve your credit score and get you one step closer to financial freedom.

Don’t forget the emergency fund!

With the snowball method, you’ll be using most (if not all) of your spare cash to pay down your debt. For that reason, it’s important to have an emergency fund so you can take care of yourself if life throws you a curveball. It’s a tricky balance. You don’t want to delay paying off debt to build a big emergency fund — you need to somehow contribute to both simultaneously.

Is the snowball method for me?

One of the biggest advantages of the snowball method is the positive psychological effect. Being in debt is like walking around with a boulder on your back, but as the boulder becomes lighter you’ll feel so much more capable and confident.

Bear in mind that there are other debt-reduction strategies. In fact, the cheapest strategy is to pay off the debt with the biggest interest rate first instead of the smallest amount owed. But the snowball method is definitely the most affirming: you’ll feel like you’re winning as you get rid of one debt after the next.

If you’re worried about wasting money on interest, look closely at the debts you have, the amounts owed, and the relative interest rates. If you’re going to make a big loss with the snowball strategy then maybe the avalanche method is better for you… More about that next week!




Thoughts, observations and insights. About money, life and 22seven. Visit