Debt Snowball vs Debt Avalanche: Which Method is Right for You?
When it comes to paying off debt, two popular strategies stand out: the debt snowball and the debt avalanche. Both work—but one might be better suited to your personality and situation.
The Debt Snowball Method
Popularized by Dave Ramsey, the debt snowball focuses on smallest balance first. List your debts from smallest to largest, make minimum payments on everything, and put extra money toward the smallest debt.
Pros:
- Quick wins build motivation
- Reduces number of payments faster
- Psychological momentum keeps you going
- Simple to understand and implement
Cons:
- May pay more in total interest
- High-interest debt continues accumulating
The Debt Avalanche Method
The mathematically optimal approach targets highest interest rate first. List debts by interest rate, make minimum payments on all, and attack the highest-rate debt with extra payments.
Pros:
- Saves the most money on interest
- Fastest path to debt-free (mathematically)
- Logical and efficient
Cons:
- First payoff may take longer
- Requires more discipline
- Less psychological reward early on
Which Should You Choose?
Choose Snowball if: You need motivation and quick wins, you have several small debts, or you have struggled to stick with debt payoff before.
Choose Avalanche if: You are motivated by saving money, you have high-interest credit card debt, or you are disciplined and can wait for results.
The best method is the one you will stick with. Some people even use a hybrid approach—paying off one small debt for motivation, then switching to avalanche.