1 BTC Project - The Debt Snowball Method

By 2MFTProductions | 1BTC | 26 Jan 2026

The focus on this platform is typically building up the asset side of your personal balance sheet. Some focus should be given to reducing the debt part of the equation. If you are growing your asset base and reducing your debt, you are increasing your net worth on both ends.

I wanted to share David Ramsey's Debt Snowball Method. I think it is a valuable tool. I agree with David Ramsey about most things. Where I differ is on how he views debt. David thinks debt is always bad and should never be used. I disagree. I think debt is a tool. Like most tools it can help you build and it can also badly hurt you.

Dave is a well known personal finance author and radio host who helps Americans regain control of their finances. His approach focuses heavily on behavior and discipline rather than complex financial theory, emphasizing budgeting, living within your means, and eliminating debt in a structured and motivating way. He famously hates debt in all forms.

Using debt to inject capital into a revenue producing asset is good debt. Using credit cards to buy shit coins in hopes of a god candle is shit debt.

So be careful!

If you have a few bad months, using debt to cover bridge the gap can be get you back to normalcy. I have done this. Many times. It is important to have a plan to get rid of that debt as soon as possible.

Back to the debt snowball method come ins.

The debt snowball method is a repayment strategy where you focus getting rid of budget line items. You build a spreadsheet and list all of your debts from smallest to largest. You start at the top of the list and begin paying off your smallest debts first, regardless of interest rate. You continue making the minimum payments on all other debts, while directing any extra money toward the smallest balance. Once a debt is eliminated, you roll the payment into the next smallest debt. Over time, your payments grow like a snowball rolling downhill.

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Using this example, all your efforts should be put towards paying off your credit card. Then onto the personal loan followed by the car payment. By the time your get to the student loan you should have $1,629.98 per month that you could easily throw at your student loan.

Financial health is everything but bad debt can cripple you. I have dug myself out of a hole using this method before.

Clear out your bad debt as quickly and aggressively as you can afford to. Then you can aggressively continue to build up the asset side.

Boost your net worth from both sides and keep building.

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