Snowball vs. Avalanche
Two proven strategies. One goal. Choose the method that fits your personality and financial goals.
Debt Snowball
The "Psychological Win" Method
You list your debts from smallest balance to largest balance, regardless of interest rate. You pay minimums on everything except the smallest one, which you attack with fury.
Pros:
- Quick wins build momentum fast
- Highly motivating to see debts disappear
- Simplifies your financial life quickly
Debt Avalanche
The "Mathematically Optimal" Method
You list your debts from highest interest rate to lowest. You attack the debt with the highest rate first while paying minimums on others.
Pros:
- Saves the most money on interest
- Gets you out of debt mathematically faster
- Eliminates the most expensive debt first
Which one should you choose?
If you need motivation to stick with it, choose the Snowball.
If you are disciplined and hate paying interest, choose the Avalanche.