Step 1: The Debt Snowball.
Before you can snowball anything, you need to own how the debt happened — no blaming the bank, the economy, or bad luck. Taking responsibility shifts you from victim to driver, and that mindset shift is what actually makes the discipline of the snowball stick.
From this day on, adopt the mindset that whatever happens in your life, good and bad, is because of you. Your choices and decisions. That's how you take responsibility. Until you can truly accept this as your new reality, it will be very difficult to even complete Step 1.
Step 1(a) — Know What You Owe
Get a piece of paper, or open a Word document on your computer and write down every single debt — credit cards, Afterpay, car loans, personal loans, HECS. Every single one. Don't skip anything. This is the moment you stop avoiding the numbers and start owning them.
Step 2 — List Them Smallest to Largest
Ignore the interest rates for now. Order your debts from the smallest balance to the largest. This is the Debt Snowball method — and there's a powerful reason it works better than any other strategy.
Step 3 — Attack with Everything You've Got
Pay minimum payments on everything. Then throw every extra dollar at the smallest debt. When that's gone, roll its payment into the next one. Watch your snowball grow. Watch your stress shrink.
Why Not Just Pay the Highest Interest First?
That's called the Debt Avalanche — and mathematically, it saves you more in interest. So why do we recommend the Debt Snowball instead?
Because maths alone doesn't change behaviour. Motivation does.
When you knock out your smallest debt first, you get a Win. A real, tangible win. Your subconscious self identifies it as a Win, and that sets you up for the next Win and the next one after that.
You free up cash flow. You build momentum. You prove to yourself that this really works. And that momentum — that feeling of progress — is what keeps you going when it gets hard.
Research-study after research-study shows that people who start with their smallest debt are more likely to pay off all their debt. Not because it's the cheapest path… Because it's the path they actually finish.
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