💰 Money School
Debt Snowball vs Avalanche
Debt snowball versus avalanche explained in plain language, with worked examples so you can pick the payoff method that fits your money and your motivation.
What you will learn
- 1Beginner: Two Simple Methods, DefinedFree 6 min
- 2Intermediate: The Trade-off, With Numbers🔒 9 min
- 3Advanced: Making Your Method Stick🔒 9 min
Beginner: Two Simple Methods, Defined
The snowball goes smallest first
With the debt snowball, you pay minimums on everything and throw all your extra money at the debt with the smallest balance, no matter its rate.
When that small debt is gone, you roll its payment onto the next smallest. You get quick wins early, which feels good and keeps you moving.
The avalanche goes highest rate first
With the debt avalanche, you pay minimums on everything and throw all your extra money at the debt with the highest APR, no matter its balance.
This method fights the most expensive debt first, so over the whole payoff you usually pay the least total interest. It is the math-optimal choice.
Both use the same rolling engine
Notice that both methods do the exact same thing with the freed-up payments. You always roll a finished debt's payment onto the next target.
The only difference is the order you attack in. Snowball orders by balance. Avalanche orders by rate. Everything else is identical.
Do this before lesson 2
- ✓List your debts twice: once ordered by smallest balance, once by highest APR.
- ✓Notice which debts sit at the top of each list.
- ✓Decide which top target would feel more motivating to knock out first.
Create your free account to unlock all lessons
You just finished lesson 1. The other 2 lessons in this course are ready for you. Create a free account to continue, then unlock the full course for $49 (or take the whole Money School for $177).
Full course $49. First lesson stays free, always.