Why the Debt Snowball Method Is Best for Your Mental Health and Money

When I finished graduate school, I had $72,000 in student loans weighing me down. But less than a year after graduation, I’d paid it all off, thanks to the debt snowball method and some hefty determination. It was aggressive and at times downright exhausting, but I’ve stayed debt-free for years and even saved enough to retire early.

The debt snowball method is simple: it focuses on paying off your smallest debt first, regardless of the interest rate, and then rolling that payment into the next smallest balance. Let’s say your monthly debts look like this:

• Medical bill: $700 (min. $20)

• Credit card: $1,250 (min. $35)

• Auto loan: $4,200 (min. $200)

If you can afford to put an extra $100 toward debt each month (beyond your combined $255 minimum payments), you’d start with that low-balance medical bill. You’d pay $120 monthly until it’s paid off. Then, you’d roll that $120 into your credit card payment, for a total monthly payment of $155.

While some experts recommend tackling the highest-interest debt first, known as the debt avalanche method, I’ve found — both from personal experience and as a money coach — that the snowball wins every time when it comes to protecting your mental health and building smart money habits.

1. It gives you a clear starting point

When you’re juggling multiple debts, it can feel impossible to figure out where to begin. The most common phrase I hear from clients is, “I don’t know where to start.”

Debt snowball has always made sense to me, but I wanted additional insight from someone who specializes in the intersection of money and mental health. Rahkim Sabree, accredited financial counselor and author of the forthcoming book Overcoming Financial Trauma, explained why this method can work well for both your brain and your budget.

“Small, quick wins can have the same effect on your nervous system as the spending behavior that got you into debt in the first place,” says Sabree.

It’s better to start small than not at all. The snowball method removes the guesswork: Just start with your smallest balance. That first step creates clarity, which can instantly reduce anxiety and stop the analysis paralysis that people in debt often experience.

2. It breaks overwhelming goals into manageable milestones

Paying off thousands (or even tens of thousands) of dollars in debt is intimidating. But when you use the snowball method, you break that big goal into smaller, achievable wins, which can calm the nervous system and reduce financial anxiety over time.

In my own CRUSH framework, the R stands for “reverse into independence” — that is to say, sometimes you have to begin at the end and work backwards. For example, my student loans came to a grand total of $72,000. I decided to set an audacious goal of paying it off in two years. Here’s how I reversed into that goal with some back-of-the-napkin math:

• $72,000 divided by 2 years = $36,000 per year (yikes, that’s more than I make in salary!)
• $36,000 divided by 12 months = $3,000 per month
• $3,000 per month divided by 4 weeks = $750 per week
• $750 per week = a little over $100 a day

The idea of paying $72,000 felt impossible, but somehow, coming up with $100 per day felt a lot more manageable. I figured I could divert some of my cash savings, sell items in my house, get a side hustle or pick up extra clients in my day job for additional commissions.

With that daily figure in mind, I reviewed my debt snowball list and determined when I could have each loan paid off.

“Financial trauma is often marked by an avoidance-shame cycle,” Sabree explains. “By leveraging the body’s natural responses to reward and motivation, individuals can rebuild their confidence and sense of control by achieving micro wins rather than one large win.”

3. It feeds the craving to cross off to-do lists

If you’re the kind of person who loves crossing items off a list (hi, me too), the snowball method works with your psychology. Every time you pay off a debt, you get that little burst of accomplishment that keeps you engaged in the process.

“Those wins can trigger a dopamine response that encourages motivation, praise and accomplishment, without the feelings of guilt, shame or fear, which can prompt continued progress towards the debt repayment goal,” says Sabree.

I stayed focused on my debt snowball goals in two ways. First, I printed my list of debts and taped it to my office wall. Second, I put a sticky note with each debt balance on my refrigerator, where I would see it every day. On the loans that were bigger and further down on my list, the sticky notes helped me satisfy that need for visible progress. Even if I just put an extra $5 toward my loans, I got the reward of creating and posting a new sticky note.

4. It creates consistency and habits beyond math and motivation

Many people give up on debt payoff plans because they feel like they’re failing at the “math.” Confusing processes or plans that require a lot of complex math don’t always keep you motivated. But the snowball method focuses less on what’s theoretically optimal and more on creating habits that stick. That consistency builds financial confidence over time.

“People are often socialized to view their worth through the lens of their financial circumstances,” says Sabree.

Motivation comes and goes, but momentum keeps you moving even when life gets stressful. That’s why they call it a snowball, because it builds up momentum over time. Each time you pay off a debt, you free up money and energy to tackle the next one. That progress snowballs, making the payments to the next debts bigger than the last.

Final thoughts: The magic is in rewiring your brain

The debt snowball method is all about rebuilding your confidence and making steady progress you can actually feel. I know it works because it helped me wipe out $72,000 of student loans in under a year, and today, as a money coach, I use it with my clients to help them pay off credit cards, student loans and even mortgages. I took the lessons I learned from the debt snowball and applied them to hitting my savings goals, enabling me to invest enough to retire by 40.

If you’ve been struggling to find motivation or feel overwhelmed by your debt, the snowball method may be the mental and financial reset you need to finally see, and celebrate, your progress. However, it’s always good to check in with a professional to verify what’s best for you.

As Sabree reminds us, “It’s important to explore what works for you, either on your own or in community with a qualified and trauma-informed financial professional who can support you on your journey.”