Credit cards and loans have been around for a long time and they are, for many of us, a normal way of life.  For some, it works great. For others though, the credit card and loan debt really starts to drown us down. Many of us have debt to some degree and a lot of us are also working hard to get it taken care of.

There is a lot of chatter out there on the best ways to pay off debt.  Some people strongly feel that the avalanche is the only way to go, but I have been hearing a lot lately on how successful paying off debt using the snowball method can be.

What is the debt snowball, you ask?  Well, here’s a quick little rundown of what it is exactly:

The debt snowball is a debt reduction strategy, wherein the debtor pays off their smallest debt first and then rolls the payment for the smaller debt into the payment on the next largest one and so on.  The point of this debt payoff method is to keep you motivated and focused while paying down your debt.

Here is a breakdown of the debt snowball steps:

1. List all of your debts from smallest to largest.  This is their balance, not the interest rate.
2. Decide how much extra you have to apply to your debt.
3. Add this amount to the minimum payment on the smallest bill, while paying just the minimums on the other debts.
4. Once you get a debt paid off, use the minimum payment that was going to that and apply it to the next largest debt.
5. Repeat this process until you are debt free.

Are you working on a debt repayment system?  How is it going for you? Or, have you been successful at paying down debt before?  What process did you use? Is there any adjustments that you would make if you were to do it again?