Snowball method for Gen Z: Here’s how to use it to pay off debt

Updated: 30 Apr 2023, 10:53 AM IST

Debt management is the most important aspect of personal finance, which you need to do well. In this article, we will make you understand about the snowball method of debt management.

Low Duration Funds  As the name suggests, these funds allow you to invest in selected bonds or debt instruments with an average maturity period between six and 12 months. The net outflow from these funds in February alone was to the tune of 4,981.53 crores.

Financial traps are not limited to the past; millennials and Gen Z are also susceptible to making money mistakes. However, the traps have evolved and taken new forms in the digital age.

Social media and the internet have opened up a world of financial temptations that can easily mislead and harm one's finances. Instant loan apps, gamified investment platforms, and online shopping options that let you delay payments are just a few examples.

Influential financial advice on YouTube and Twitter may not be as reliable as they appear. Online stock tipsters and day trading gurus promise quick wealth but can lead you down a rabbit hole of financial insecurity. Don't let these modern traps ensnare you and your finances.

According to a recent Credit Karma report, Gen Z is accumulating credit card debt faster than any other generation. They're the only group to have seen an increase in debt over 30 days overdue.

Despite having the lowest credit card debt compared to other generations, Gen Z's debt has grown rapidly by around 6% in just three months through May 2022. It's a concerning trend, and seeing how things develop in the coming years will be interesting.

Understanding debt and its impact on Gen Z

Debt is borrowing money you promise to repay with interest over time, but it can be a double-edged sword. For Gen Z, the debt burden is growing, with many struggling with high living expenses, poor money management skills, and mounting financial obligations.

This debt crisis can have devastating effects, leaving young people overwhelmed and unable to keep up with payments. By seeking financial guidance and being proactive, Gen Z can break free from the cycle of debt and take control of their financial future.

However, there are various ways to manage your debts. The Snowball method is one the ways to do so; let’s dive deeper to understand.

Snowball method and how does it work

In the approach of managing debt through a snowball method, you pay off your smallest debts first, regardless of their interest rates. By working your way up to larger debts, you can gain momentum and a sense of achievement with each cleared debt.

To use this method, list your debts from smallest to largest, make minimum payments on all but the smallest, and direct any extra money toward paying off that smallest debt. Once that's cleared, move on to the next smallest debt and repeat the process until you're debt-free!

Another helpful strategy is to create and follow a budget. Take note of your income and expenses; you can easily identify areas where you're overspending and adjust your spending habits accordingly. Keep in mind every little bit counts when it comes to debt management. Start small, remain consistent, and be well on your way to financial freedom!


Managing debt may seem challenging, but it is possible to take control of your finances with effective strategies such as the snowball method. It is crucial to start early and work towards financial independence. Don't hesitate to seek help from financial advisors or credit counseling services if you need guidance. Take charge of your debt today and start working towards a debt-free future.

Anushka Trivedi is a freelance financial content writer. She can be reached at

Disclaimer: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.

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First Published: 30 Apr 2023, 10:53 AM IST