Martin Lewis "Snowball" trick

I know quite a few people who have used this method. I used it myself to reduce my wife's debt when I first met her.

Apart from paying all the debts off straight away, long term it is the least expensive way to get rid of multiple debts, as it minimises the amount of interest paid, and therefore decreases the total repaid overall.

For the same reason, unless you can get a savings interest rate higher than your highest debt interest rate, it is a better financial decision to use your money to pay off debt than it is to save.

To use my wife's debt as an example: we started by transferring a large part of her credit card debt to a 0% card, then set up a DD to pay the minimum payment on that 0% card, as we knew that that debt would then remain at £xK for 28 months. Then we cleared what was left (at 17.9%), while paying the bare minimum against the overdraft (3%) and mortgage (2.8%).

What my wife had been using to overpay the mortgage we used to clear the expensive portion of card debt, getting rid of that in three months. Then we used the money that had been paid against the card debt (minus the new minimum payment on the 0% card) plus the mortgage overpayments to clear the overdraft (and put measures in place to help avoid using the overdraft again!)

Then we cleared off the mortgage, using the money we weren't putting towards the other, now paid off, debts, but were careful to also make sure we transferred the card debt to another 0% card before the deal ran out!

Once the mortgage was clear (five years early) we paid off the 0% card.

In total, over a seven year period, we payed just over £3000 less than we would have done had we tried to pay the debts off at the same time, largely due to not accruing interest.

Yes this is very true, I don't think this is Martin Lewis' own idea, it's been a 'thing' for wellover 15/20 years I'd say since I first became aware of it.

It works but you must follow it and be strict about not taking on more debt.

You may even find some snowball calculators if you search online.... you put in the details of each debt, what the interest rate and minimum payment are and what amount you can afford to put against the debt and it will calculate how to allocate the payments.

Hi Nicola, sorry to hear you are having difficulties. What worries you about trying this? It’s does sort of seem common sense?

This is definitely a great strategy for paying off debt and for clearing the most expensive debts first. Also, you'll see the amount of interest pay go down more quickly as you pay those down.

I'd also suggest trying to consolidate your debts if you're able -- via a loan from your bank or doing a balance transfer. It's great if you can get one of those 0% deals, even if it's for a short period, because then are you paying down the debt itself rather than the interest.

Here's our story on Netmums about the Snowball Effect and how it works, in case anyone else here is interested.

https://www.netmums.com/life/martin-lewis-shares-snowball-trick-for-clearing-debts-faster

You can also get help on our Money Matters board. We've partnered up with Stepchange, the debt charity, and they'll be popping onto the board and answering as many questions as they can, so post yours here:

https://www.netmums.com/coffeehouse/money-advice-1127/money-matters-1133/

Tell us how you get on and what you're planning.

Great tip, Eve!

If you haven't got your own house with equity, then look into an IVA. My daughter had anIVA & when she lost her job & couldn't make the payments, her debt was written off

did this years ago. Started in around 2005. £9k credit card and overdrafts. Moved credit cards to 0% accounts and paid minimum payments. Cleared overdrafts one by one. Kept moving cards around when deals ended. Cleared credit cards. Cleared car loan £7k and then student loan £8k. Then hit the mortgage. Now several years mortgage free (low interest rates really helped) with 4 years gross income in the bank and paying into pensions etc. It worked for me. Soon planning to buy a second property to rent out with the saved money. Hit one balance and when gone put that money into the second alongside what you were already paying. Slow initially but quickly speeds up. Good luck x

Having been in and out of debt for years specially when my own 2 were younger as a single Mum. I’d personally say whilst I fully understand the theory behind it, and Martin Lewis when he first came into our vision was an amazing talent and font of advice, since he’s become more monetised and sponsored, much of his advertising is now his paid job and he’s bound by conditions to advertise it, I feel more wary, much of his marketing now is based around going to one site or another and I don’t necessarily think he’s as “pure” in his intention as he was in the beginning. (Thus said, just so you can see I’m not a Martin hater)

I personally have slowly realised as I’ve got older that if you write or copy a generic letter. I’m sure there’s links on here even, offering the debts all a minimum amount according to what debts they are and how much you owe,

RENT DEBT IS 1st

COUNCIL TAX

and the like - think of the roof over your head and anything that helps keep it as number 1

AFTER FOOD! GAS ELECTRIC and things your children NEED!

the rest come after and the amount goes down in order of priority, so if you owe rent contact them first offer them the lowest you can even £1 explain you owe loads but you want to show commitment and regular payments and you need to start low so can get organised and that at least the debt is going to go down. YOU MUST REALLY STAND YOUR GROUND! Do not be bullied - email them, say you offered but they refused or similar so your going to the CAB regards an IVA or similar - even if it’s a fib! Once they know you truly mean your price they WILL accept it! -

sometimes with debtors - like them, you have to enhance the situation a little

I’m myself paying things off from sometime ago, (I got diagnosed with stage 4 bowel cancer during covid and got in a pickle) and debtors and those that are sold to company’s thinking they’re so much more authoritative than they are, are much more amenable now to a smaller monetary amount.

Many “sold” debts you are able to offer a small amount online per month without even speaking to someone or forever filling in the useless “income/outgoing” type forms that expect you to be psychic.

Just bear in mind that debts take time to pay.

Do NOT sell your life short in a bid to clear it quicker

but pay what you can manage AND STILL have a surplus to use to live and for unexpected items or treats for your children, they shouldn’t suffer and debt places shouldn’t expect them to! If they do. Go back with the Bankruptcy/IVA line! - If needs must to make sure your ok and can manage whilst paying them off, then you do what you have to for your kids and your own sanity!

YOU CONTROL YOUR DEBT! YOUR DEBTORS DO NOT CONTROL YOU! Or your life.

I’m rather bitter about debtors acting like God as a family member committed suicide with no gas Electricity food or money. And none of us knew!

- I personally on an average debt of £3690 I pay £10 per month. FOR NOW! on a debt of £360 I pay £4 per month.

don’t be afraid to stick to your offer,

DON’T be Bullied,

IF it takes time it takes time

YOU can always change it later to a higher amount once other smaller debts have gone or situations change, or pay more if you feel able.

The point is setting an arrangement will halt the interest.

You will feel in control and can breathe.

The debt will become stable

YOU will feel and see a slow improvement as time goes by.

DON’T Be scared they’ll take a long time! Situations change you may be able to pay more sometimes or permanently. - if you manage to save anything, keep it in mind for when they offer a “reduction” offer!

BARGAIN on the reduced pay off offer if you can pay it. It’s not static they WILL go lower.

When younger I’d literally starve to get them paid in fear of reprisals or bailiffs!

DO NOT BE AFRAID

DO NOT BE ASHAMED

DO NOT STRUGGLE IN SILENCE

DO NOT WORRY IN SILENCE

Times have changed, courts and debtors have realised fear doesn’t get them paid any quicker or reliably. They’ll be happier with a small token amount regularly. Than chunks intermittently that kill you!

I hope that helps someone at least 🙏

And yes, standing your ground is key! Don't be afraid to negotiate and assert your boundaries. Remember, you are in control of your debt, not the other way around.

I think you’re absolutely right there Brenda -

I too often felt and occasionally still think sh@t it’s never going to end, but

i have to think, and so should anyone else….. as you said. WE are in control. No one can have what we haven’t got and no one expects anyone to starve or be cold! We will always come up against “jobsworths” who think they’re in charge of the world who don’t realise when some of us say that’s why we can offer that it genuinely is! It’s awful when you feel out of your depth that some advisers or customer service employees feel they can “shame” you or try and embarrass you. Don’t let them. WE ARE IN CONTROL !!