Debt Snowball vs Avalanche Method
Compare debt snowball and avalanche methods. Learn which debt payoff strategy saves more money and which keeps you motivated.
Debt Snowball
Pros
- ✓Quick wins build motivation
- ✓Psychological momentum
- ✓Easier to stick with
- ✓Eliminates accounts faster
- ✓Great for behavior change
Cons
- ✗May pay more interest overall
- ✗Not mathematically optimal
- ✗Ignores interest rates
Best For
People who need motivation and quick wins to stay on track, or those who struggle with staying committed to debt payoff plans.
Debt Avalanche
Pros
- ✓Mathematically optimal
- ✓Pay less total interest
- ✓Save money over time
- ✓Faster debt-free date (sometimes)
Cons
- ✗May take longer for first payoff
- ✗Requires more discipline
- ✗Less psychological reward early on
Best For
Disciplined individuals who are motivated by math and want to minimize total interest paid.
Key Differences at a Glance
| Factor | Debt Snowball | Debt Avalanche |
|---|---|---|
| Strategy | Pay smallest balance first | Pay highest interest first |
| Total Interest | Typically higher | Minimized |
| First Win | Usually faster | May take longer |
| Motivation | Built-in through quick wins | Requires self-discipline |
| Best For | Behavioral motivation | Maximum savings |
The Bottom Line
Both methods work - the key is choosing one and sticking to it. If you need motivation, the snowball method provides quick wins. If you want to save the most money, the avalanche method is mathematically superior. Research shows the best debt payoff method is the one you will actually follow through with.
Frequently Asked Questions
Which method saves more money?
The avalanche method always saves more money in interest because it prioritizes high-interest debt. However, the difference may be small depending on your specific debts.
Can I switch between methods?
Yes, some people start with snowball for motivation, then switch to avalanche once they build momentum and confidence.
What if my highest interest debt is also my smallest?
Lucky you! In this case, both methods are identical, so you get the best of both worlds.