Recently, I tuned in to David Ramsey’s financial podcast, and wow! There are some wild stories out there. The numbers on student loan debt are really something – they're huge!

It’s amazing how many people, both couples and single people, call into the podcast to talk about their debt. Most have a combination of student loans, car loans and a mortgage, as well as significant credit-card debt.

One particular caller, a newly qualified dentist, had $1 million in student loan debt, $380,000 in credit-card debt, a car loan for $80,000 and a $250,000 mortgage; to me, this is simply outrageous. Honestly, it makes you wonder how these people get approved to take on so much debt, when it’s clear that they don’t have the income to support it – or at least won’t have it until their true earning potential develops.

What is especially interesting about these podcasts is that the people who call in all seem to realise that their debt has become unsustainable, but they are looking for a “golden ticket” that will get them out of the situation. I loved hearing Mr Ramsey say this: “You have clearly felt the good times, but are you ready to feel some pain in order the tackle it?”

Mr Ramsey gives good, solid financial advice about paying off debt. There are a lot of different strategies out there. One that is particularly well known is the “snowball” method. Many people use it to tackle credit-card debt or personal loans, but you can tweak it to handle any type of debt, other than mortgages. This method offers a clear, motivating way to work towards being debt-free.

The main idea is to start by paying off your smallest debts first, regardless of interest rates, and then move on to bigger debts as you clear the smaller ones. This approach differs from the “avalanche” method, which prioritises paying off debts with the highest interest rates to cut down on total interest costs. For many people, this approach is a very motivating way to pay off debt and restores a focus on maintaining financial stability.

To use the snowball method, you first need to make a detailed list of all your non-mortgage debts. This includes personal, student, and car loans, as well as credit-card balances and any other outstanding debts.

Once you have your list, arrange the balances from the smallest to largest, ignoring the interest rates. This order is key because it helps build the psychological momentum that the snowball method leverages.

Next, create a realistic budget that allows for extra debt payments. After covering essentials like housing, utilities, food and savings, put any leftover money towards the smallest debt. Once that's paid off, take the amount you were paying on this debt and add it to the minimum payment of the next one on your list.

Keep repeating the process, and as each debt is cleared, this snowball effect will leave you with more money to tackle the next one even more quickly.

The main advantage of the snowball method is the motivational boost it provides. Quickly paying off a small debt gives you a real sense of accomplishment, building confidence and strengthening your commitment to the debt-repayment journey.

This psychological push is crucial, especially during long or tough repayment periods, as it helps you stay on track and prevents you from quitting.

Another huge benefit is the clarity this method offers. By concentrating on one debt at a time, you can easily see your progress, which feels more rewarding than dealing with multiple debts at once.

This focused strategy also simplifies your decision-making. The whole process seems more manageable because you are not worrying about interest.

However, one key aspect of the snowball method is that it takes discipline and consistency. It's crucial to stick to your plan, pay extra whenever you can and resist taking on new debt.

Many people find it useful to either automate payments or set up reminders to stay on course. Regularly checking your progress can also keep you motivated and help you make any necessary adjustments to your budget or repayment plan.

The snowball method works great for a lot of people, but it’s not a perfect fit for everyone. If you have high-interest debts, you might do better with a mixed approach: pay the minimum on all your debts except for the one with the highest interest rate.

Budget to focus on paying off this one to cut down overall costs. But if achieving quick wins is what keeps you motivated, the snowball method – where you see debts disappear quickly – can be just what you need to stay on track and restore financial stability.

From my perspective, the snowball method is a straightforward, psychologically rewarding approach to paying off non-mortgage debt. By focusing on clearing the smallest debts first, you can quickly generate a sense of accomplishment, which fuels continued effort and commitment.

Although it may not always be the most economical approach in terms of interest savings, the motivational benefits often make it an effective choice for those seeking to reduce debt and regain financial control.

Tips for success:

• Stick to your payment plan

• Avoid accumulating new debt during the process

• Create a budget to free up extra money for debt repayment

• Consider consulting with a financial adviser if you need personalised guidance

Like any debt-repayment strategy, success ultimately depends on discipline, perseverance and a clear plan tailored to one’s financial situation. With patience and consistency, the snowball method can transform a daunting mountain of debt into a series of manageable steps, leading to a debt-free future.

• Carla Seely has 25 years of experience in the international financial services, wealth management and insurance industries. During her career, she has obtained several investment licences through the Canadian Securities Institute. She holds the ACSI certification through the Chartered Institute for Securities and Investments (UK), the QAFP designation through FP Canada, and the AINS designation through The Institutes. She also holds a master’s degree in business and management