How to Pay off Debt with the Snowball Method

Are you in debt and are looking for tips on how to pay off debt with the snowball method on your current income? Well, then you have come to the right place because I used the snowball method many years ago and paid off my £12,000 debt in 18 months on a low salary without needing to take a side hustle to subside my income. Debt is a deliberating disease that can suck the life out of you emotionally and mentally. It took me almost 2 years to pay off my debt and I can tell you the feeling was euphoric. I am sure you are still wondering what the snowball method is and how it can help you pay off your debt.

The snowball method is a way of paying off debt by starting with the smallest debt and working your way up. I used this method many years ago without even knowing what it was called and that someone had explained it so well in this article. I am glad I used this method under my own cognisant and now with backed-up research, I can confidently declare it truly works and allows you to become debt-free much quicker than some traditional methods. I hope the tips I share on how to pay off debt with the snowball method will be useful and help you see light at the end of the debt tunnel. For those truly struggling with debt, I recommend speaking to a debt charity for advice and support.

How to Pay off Debt with the Snowball Method

When I was at university, I was practically drowning in debt, I worked 2 jobs and I still couldn’t make heads or tails of where my money was going. I was trying to maintain a certain lifestyle whilst trying not to sink under the burden of owing money to a payday loan, credit cards companies and the like. I recently shared the 3 financial mistakes I made and learned from as well as share how I am now able to save at least £1000 a month easily. To get to a place where I am right now financially took time, learning, effort and a lot of patience on my part.

When you are in debt and are actively working to pay it off, it can be quite disheartening repaying so much but seeing little to no change in your circumstances. Before I started using the snowball method, I paid off debt based on who chased me first, I paid them whatever I could afford and often that wasn’t enough to even be a minimum amount. Every month I would look at the status of my debt and there was little to no change and it was depressing. I knew something had to give I just didn’t know what until I had had the brilliant idea of writing everything down to the last penny.

After writing it all down, I wrote down what my earnings were and worked out the minimum was that I could afford after my essential bills (rent, utilities, mobile phone, transport and food) had been paid. When you are trying to get out of debt, it’s important to know what you essential bills are, how much you spend on them and what you can tighten your belt on for a few months. In this post, I will break down with examples on how I paid off my debt using the snowball method.

What I owed at the beginning	What I owed after 8-months
£11,112.24	£4,817.20

The first thing I did when I made the decision to pay off debt was to write down every single penny that I owed. I had to be 100% honest otherwise this wasn’t going to work and then after this I wrote down a budget. At that time I was living in shared accommodation (renting a room in a house) so I did not have many bills to pay beyond, rent, food and transport. I then deducted my ‘essential bills’ from my salary and what was left, I equally split on the companies that I owed and this looked like this:

What I was making	Bills
£1200 p/m	Rent – £500 Food – £200 Transport – £120 (remainder was £380)

The second thing I did was called the companies I owed money to and told them my then ‘current’ predicament. I informed them, I could afford at least £35/£50 a month but wanted an opportunity to increase it as I paid off other debts. Almost all were understanding and sometimes its about whom you catch on the call, the debt collecting agency can be helpful or unhelpful based on whom you speak to (this was my experience). Using the snowball method, I looked at my smallest debt (a store card for £130) and minimum payment was £15 a month but I committed to £35 a month.

Using the snowball method, I pinched by belt tight on food and took the bus to work instead of a train and that allowed me to clear the £130 in 2-months. The second smallest debt I had was for £250, they had accepted a £35 monthly payment but once I cleared the store card, I now had the £35 I was paying for the store card plus the £35 against the second smallest debt making it £70. Within a month and half I cleared the £250, I worked from home on some days, cooked all my lunch meals and made them stretch. I continued on this trajectory and within 8-months I was able to clear almost 75% of my debt.

The more I paid of my debt, the more I realised that I actually liked finding ways to be more frugal so I could pay it all off quicker. I will not lie to you it was not easy, but I made sure all my repayments were automated so that I wasn’t tempted to keep a little instead of increasing a repayment on the next smallest debt. I made a realisation as I continued on the debt-free journey that even though getting out of debt can be tough, if you find the right method, the right approach and change your mindset towards money it goes a long way.

I have been debt free for many years now (5+ years) and I absolutely enjoy the financial freedom that it gave me and I continue to live by 1-motto, “if you don’t have it, don’t spend it” aka the money on the credit card is not yours, don’t spend it. I have also continued to live below my means and not above it.