If you're wondering how to pay off debt, the Debt Snowball worked for me—and it might work for you, too.

By Kristine Gill
Updated October 22, 2018
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Ready Rice cooks in about 90 seconds. It also costs about three times as much as the type you have to boil yourself. And so microwaveable rice was the first little luxury I cut back on when I started my debt-free journey this past year. About nine months later, I’ve paid off about $10,000 in debt and cooked about as many grains of rice sans microwave. If you're wondering how to pay off debt that you've racked up, consider the method that worked for me.

Of course, rice was only a small part of my journey, but changing the type of rice I purchased illustrates how I transformed my spending habits so I could start to save money and ultimately pay off debt.

I became a diehard Dave Ramsey fan after a friend suggested Ramsey's podcast as a frank guide to money. Chief among his tips to zero debt and a whole lot of wealth—aside from budgeting, of course—is what he calls the debt snowball. Here’s how it works: You list your debts from smallest to largest and start by paying off your smallest debt first. You throw everything you can at that first debt, all the dollars saved from Ready Rice, nights out with friends, and the wedding you skip when you know it will break the bank. Once that first debt is paid, you use what you might have spent toward it each month and combine it with all the other money you’re scrimping and start putting it toward the second debt (while still paying minimums on the other debts).

Pretty soon, you’ve got great momentum and you can see the little fist-full of ice and powdered fluff gaining speed and size as it tumbles down the hill. The idea seemed counterintuitive at first; I’d read so much about prioritizing the debt with the biggest interest rates that I’d been stuck in a cycle of making credit card payments only to find I needed to use the credit card to get myself to the next paycheck. I feel sick imagining what Ramsey would say about that. He can be pretty blunt on his podcast.

But the debt snowball had some appeal for me too because the technique uses the power and satisfaction of small victories to propel you. I liked that. Mainly because I like instant gratification (remember my former Ready Rice habit?). A few months later, I had paid off the remaining $2,400 on my student loan which, for the last nine years since graduation, I’d been making the bare minimum $40 a month payment. With that hurdle cleared, I was able to pay off the $2,000 couch we bought on credit and about $3,000 in vet bills (we own a small home zoo) that I’d also charged on a no-interest medical credit card.

The $2,000 mattress we invested in last year was my latest victim. And even though it was tempting to continue paying the small minimum payment every month for the next five years, I knew I’d stress less without it there. Next up is that new car I’ve had for all of six months. The goal, with my current income and a few side hustles, is to decimate that loan within the next 12 months. After that, it’s the mortgage, but Ramsey focuses on ramping up savings and emergency funds before tackling that last loan.

These days, I might spend more time at the stove, willing that pot of water to boil, but the future feels lighter somehow and the small sacrifices well worth it.