When using the debt snowball in Baby Step 2 of the Baby Steps tracker at https://www.ramseyplus.com/track/baby-step/2 or through the Financial Peace mobile app, we'll organize your debts for you according to the debt snowball method.
If the first debt in your debt snowball isn’t the smallest debt, there’s a good chance it is marked as IRS debt. The reason for that is we always recommend paying the IRS first when it comes to the debt snowball, even if it isn't the smallest debt, for a couple of reasons:
- Their interest rates and penalties are incredibly high.
- They have virtually unlimited power to collect.
Put them at the top of your debt snowball and pay them first. It’s one of the few times we say to work the debt snowball out of order, which is normally smallest to largest.
Learn more about the strategy behind the debt snowball HERE.