◈ GLOSSARY · PERSONAL FINANCE
Debt Snowball.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
A debt-payoff method that targets the smallest balance first, regardless of interest rate, while paying minimums on everything else. Once the smallest is gone, you roll its payment into the next-smallest. Mathematically it costs more than the avalanche method, but the quick wins keep people motivated — and a plan you'll actually finish beats an optimal one you abandon.
◈ IN PRACTICE
Example
Debts of $800 (medical), $4,500 (card at 22%), and $12,000 (car at 6%): pay minimums on the card and car, throw every extra dollar at the $800 medical bill, then redirect that payment to the credit card next.
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