Snowball or Avalanche?
(And We’re Not Talking About Aspen!)
Debt can seem very overwhelming, especially when you are looking at a large amount of money spread across multiple sources. There is often this dreadful feeling of fear, not knowing where to even begin to tackle the problem. The good news? You are not alone! There are proven methods to tackle debt in a structured, goal-driven way — two of the most popular are the Debt Snowball and the Debt Avalanche.
Each has its own strengths, and understanding the difference can help you choose a strategy that works best for your situation, mindset, and goals.
What is the Debt Snowball Method?
The Debt Snowball focuses on building momentum in paying off your smallest debts first, regardless of the interest rate. This is the method that we adopted to pay off our debt. We felt that it would be important for us to see the progress and to be able to have some momentum.
Here’s how it works:
Create a list of your debts from the smallest balance to the largest.
Make minimum payments on all debts except the smallest.
Throw all extra money you can at the smallest debt until it is gone.
Once it’s paid off, take the amount that you were paying for that debt and apply it to the next-smallest debt.
Continue the process, snowballing your payments as you go. As you pay off each debt, it frees up more money to pay above the minimum payment on the next debt.
Why it works:
This method gives quick wins, paying off the smallest debt is a victory, which builds motivation and momentum!
We find that the debt snowball is best for:
People who need encouragement and quick progress to stay motivated.
Feel overwhelmed by the number of debts.
Struggle with staying committed to long-term financial goals.
What is the Debt Avalanche Method?
The Debt Avalanche takes a more math-focused approach by paying off the highest-interest debt first, regardless of the balance.
Here’s how it works:
List all debts from highest to lowest interest rate.
Make minimum payments to all debts except the one with the highest rate.
Once again, apply all extra money possible towards paying off the high-interest debt.
Once it is paid off, roll that repayment into the next-highest interest debt.
Continue the process until all debts are gone.
Why it works:
This method minimizes how much interest you pay over time, which means you’ll likely get out of debt faster and cheaper.
This is best for people who
Are detail-oriented and financially disciplined
Want to pay the least amount of interest
Can stay motivated without early “wins”
So Which One Should You Choose?
Here’s the truth: the best method is the one you’ll stick with! Some people need emotional wins to keep their motivation high. Others are about numbers and want the most efficient path. In the end, the most important part of this is your goals, your discipline, and what will help you be successful!
Paying off debt is a journey. Whether you’re snowballing or avalanching, doing a hybrid approach or something different, consistency matters most. Celebrate your wins — big or small — and keep your eyes on completing your goals.
If you’re unsure which method fits you best, financial coaching like we provide here at Precision Coaching can help you walk through the numbers and through the emotions, building a plan that will actually stick!
