Given South Africa’s geographic location, snow is hard to come by for the average citizen. However, snow does occasionally fall in some parts of the country when the colder weather passes – you can actually see live webcams here. We won’t be focusing on real snow today, but rather on the analogy and methodology behind a debt repayment method linked to snow called the debt snowball.

The debt snowball method is a debt repayment strategy which involves paying off your smallest debt first, then paying off your second smallest debt and continuing to follow this pattern until you reach your largest debt. Your largest debt will always be paid off last when using the snowball strategy.

The analogy comes from the idea that in order to make a large snowball, you have to start by rolling a small one and carry on rolling the same snowball until it becomes a large one. The momentum you gain from rolling your small snowball into a big one will help to keep you motivated to reach the next goal.

Once the smallest debt is paid off, you’ll have that extra cash to pay off the second smallest debt. Your repayment amount will continue to grow as the number of debts you payoff increases.

How does it work practically?

  1. Take a piece of paper and make a list of your debts from smallest to largest.
  2. Make the minimum payments on all of the debts on your list except for the smallest one.
  3. Pay as much as possible on your smallest debt
  4. Once the smallest debt is paid off, add the amount you repaid on that debt to the next smallest debt
  5. Continue to repeat this process until all of your debts are paid off in full

Top tip: stick this list up somewhere prominent so that you’ll continuously be reminded of where you are and where you want to be (having paid off your largest debt!)

Increase the pace at which you pay off your debts by finding extra money. This could be through cutting down on unnecessary expenses or finding new ways to generate income. One less takeaway per month or selling your unwanted items online are just small changes that you can make to generate that extra cash!

This method is a great way to pay off your debt as it focuses on your behaviour rather than focusing on the numbers. We tend to be able to understand human behaviour better than understanding the complicated math which makes it easier to stick to the plan.

If this strategy doesn’t sound appealing to you then keep an eye out on our blog as we unpack other debt repayment strategies over the coming weeks!


Written by .

Max has joined the 22seven team as a Slice and Blog writer. He has experience in start-ups and the corporate world alike, where he's currently employed in the finance industry. He's a strong believer in improving financial literacy amongst South Africans. You can catch him in the gym, exploring Cape Town's food scene or watching sports in his free time.
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