May 27, 2021

The Snowball Method

The Debts tab in Money Management teaches user how to utilize the snowball method, a debt-payment strategy that can dramatically reduce both the time it takes to pay off debt and the amount of interest you’ll pay without increasing your monthly contribution toward debt.

To use the snowball method, you should “roll over” your monthly minimum payments as each debt is fully repaid. In other words, when you’re done paying off a debt, you’ll take the monthly contribution to that debt and put it toward another. The total amount you pay each month stays the same, but the monthly contribution to each debt goes up progressively as they are paid off. This can help users get out of debt without the need for painful budget cuts.

The dotted line that extends to the far right of the chart represents the status quo — how long it will take to get out of debt by making minimum payments and without rolling over payments. 

The colorful graph represents the expedited payoff for each debt, to be achieved by rolling over debt payments. Hover your mouse over the graph to view how much total debt you will owe at any future point in time, based on the current projection.