The snowball method in getting out of debt

By Randell Tiongson on March 18th, 2024

The debt snowball method is a debt reduction strategy where you pay off your debts in order from smallest to largest, regardless of interest rate, while making the minimum payments on all other debts. Once the smallest debt is paid off, you take the money you were paying on that debt and apply it to the next smallest debt. This process continues until all debts are paid off.

In the Philippine setting, the debt snowball method can be effective for several reasons:

1) Psychological motivation: The method provides quick wins by paying off smaller debts first, which can motivate individuals to continue their debt repayment journey. This sense of accomplishment can be particularly important in cultures where positive reinforcement is highly valued.

2) Cultural factors: In Filipino culture, the concept of “utang na loob” (debt of gratitude) and the desire to maintain social relationships can sometimes lead to individuals taking on more debt than they can handle. The debt snowball method offers a structured approach to managing debt that aligns with cultural values while still helping individuals become debt-free.

3) Simplicity: The debt snowball method is straightforward and easy to understand, making it accessible to a wide range of people, including those who may not have a strong background in personal finance.

4) Behavior modification: By focusing on one debt at a time, individuals are more likely to stay committed to their debt repayment plan and avoid becoming overwhelmed. This method encourages discipline and consistency in managing finances.

5) Financial empowerment: As individuals pay off their debts one by one, they gain a sense of control over their financial situation and build momentum toward achieving their financial goals. This empowerment can lead to long-term financial stability and improved overall well-being.

Overall, while the debt snowball method may not be the most cost-effective strategy in terms of minimizing interest payments, its effectiveness in providing psychological motivation and aligning with cultural and behavioral factors can make it a valuable tool for debt repayment for Filipinos.


One thought on “The snowball method in getting out of debt”

  • Thanks a lot for this more detailed information on the snowball method of getting out of debt.

    I also wish to thank you Mr. Randell for a lot of literature on personal finance that you have been sharing to us. Indeed, I have been using your books as reference materials in my lectures which I have been doing for government employees (now only OFs). I am on my semi-retirement phase and I have started sharing personal finance management to government employees as I know they need development on this area as part of their soft skills.

    I look forward to a dining experience at your “Mano” and have a taste of your “Salmon in a Creamy Caper Sauce” or “Brazilian Ribeye”. I just realized your restaurant is near our Condo which is just along Sct. Esguerra.

    By the way, I always make sure I read your emails/posts and it continue to enrich my materials.

    Again, thank you and may God bless you more!

    Best regards,


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The snowball method in getting out of debt