# Debt Snowball

*Everyday Money — Finicade finance glossary*

The debt snowball pays off your smallest balance first, then rolls that payment into the next smallest, regardless of interest rate. Mathematically it's inferior to attacking the highest rate — you pay more interest overall. Behaviourally it often wins, because closing an account entirely delivers a visible victory, and people who see progress keep going. If you have five debts and the smallest is $400, clearing it in month one buys motivation that a spreadsheet cannot.

**Also known as:** snowball method

**Related terms:** [Debt Avalanche](https://finicade.com/glossary/debt-avalanche), [Debt](https://finicade.com/glossary/debt), [Minimum Payment](https://finicade.com/glossary/minimum-payment), [Credit Card](https://finicade.com/glossary/credit-card)

Source: https://finicade.com/glossary/debt-snowball