When it comes to paying off debt, two strategies dominate the conversation: the debt snowball and debt avalanche methods. Both are proven approaches, but they work very differently.
Debt Snowball Method:
- Pay minimum payments on all debts
- Put all extra money toward the smallest balance
- Once smallest debt is paid off, move to the next smallest
- Builds momentum through quick psychological wins
Debt Avalanche Method:
- Pay minimum payments on all debts
- Put all extra money toward highest interest rate debt
- Mathematically optimal - saves the most money
- Requires more discipline and patience
Which Should You Choose?
- Choose Snowball if you:
- Need motivation and quick wins
- Have high stress about debt
- Struggle with consistency
- Have several small debts
Choose Avalanche if you:
- Are disciplined and patient
- Want to minimize total interest paid
- Have large interest rate differences
- Are motivated by math over emotions
The best method is the one you'll actually stick with. Both will get you debt-free!