A debt snowball accelerates the paying off of multiple debts, including credit cards, by using the "rollover" method. As soon as one debt is paid off, the freed-up payment amount from that debt is used to help pay down the next debt even faster. The process continues until all debts are paid off. The debt snowball is the most cost effective, fastest, and emotionally satisfying way to get completely out of debt.

To create a debt snowball payoff plan:

• Add all of your debts (the Min Pymts column shows the number of payments needed to pay off each debt by paying only the minimum payment)
• Check the listed debts you want to include in the snowball
• Change the order in which the checked debts are listed which is the order in which the debts will be paid off
• For "Total paying each month" enter an amount that is equal to or greater than the "Total minimum monthly payment" amount (setting the amount you pay each month is how you control how long it will take to pay off all of the snowballed debts ... the higher this amount the shorter the length of the snowball plan)
• When you click the Calculate icon, you build a comprehensive plan that you can follow to debt freedom as fast as possible within the limits of your financial situation and goals.

Add the snowball plan to your Budget. Before making these changes to your Budget, either take a backup or clone your Budget.

• For each bill payoff schedule, either add a new bill or add the payment schedule to an existing bill.
• For each credit card payoff, either add the snowball payment schedule or create an amortization schedule for the credit card that matches the snowball payment schedule.

If you are not comfortable with how the snowball payoff plan impacts your Budget, go back and adjust the snowball settings to create a new plan that will fit better within your financial situation.

Reconcile credit card statements

It is important to continue reconciling statements for snowballed and amortized credit cards every month. In addition to providing you with a record of statements and monthly balances, reconciling a monthly statement that has a zero new balance is how an amortization schedule is finished. When a statement with a zero new balance is reconciled, the credit card is automatically unamortized and any remaining scheduled payments are deleted. The credit card is again ready for use.

Recalculate the plan

To ensure that your snowball plan does not get too far out of sync with the actual debt balances and/or payment due amounts, every few months update your list of debts in the snowball with current numbers and recreate the snowball plan. Then update plan payments in your Budget to agree with the updated snowball plan.