Definition
A payoff method that targets the smallest balance first for quick wins, then rolls each freed-up payment into the next debt. Slightly more interest than the avalanche, but the momentum keeps many people going.
Why it matters
Debt payoff is a behavior problem before it is a math problem. The snowball's early victories keep real humans in the game, and a finished plan beats an optimal abandoned one.
Example
Owing $800, $3,500, and $12,000, a snowballer kills the $800 first. That minimum payment then rolls into the $3,500 debt, and the growing payment snowballs into the $12,000 last.
Put it into practice
Related terms
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