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Debt Snowball vs. Debt Avalanche: How to Pay Off Debt Faster

 

Debt is like that naughty friend who shows up at your party and refuses to leave. You politely ignore it at first, but the longer it lingers, the more uncomfortable you feel. It takes over your thoughts, drains your wallet, and keeps you from living your best life.

But you can kick debt out – and faster than you think. You just need the right strategy.

Two approaches often steal the spotlight regarding debt repayment: the Debt Snowball and the Debt Avalanche. Both are effective, but they take different routes to debt freedom.

In this post, I’ll explore these methods, break down their pros and cons, and help you figure out which fits your situation like a well-tailored suit. Let’s get to it!

Why Having a Debt Payoff Strategy is Essential

Before we move to the details, let’s talk strategy.

Why does it matter?

Well, think of it this way: tackling debt without a plan is like trying to build IKEA furniture without the instructions. You might eventually put something together, but it’s likely to be lopsided, missing screws, and you’ll probably give up halfway through. Debt is no different.

If you approach it randomly—making a payment here and there—you would likely make no progress. Worse, you might even fall further into debt.

A solid debt payoff strategy gives you:

  • Focus: You know exactly what to do next.
  • Momentum: As you see progress, you’ll be motivated to keep going.
  • Peace of mind: A plan takes away that nagging feeling of chaos and puts you in control.

Now, let’s meet our two leading players: Debt Snowball and Debt Avalanche.

What is the Debt Snowball Method?

The Debt Snowball method is simple, effective, and gives you quick wins that can keep you motivated.

debt snowball

Photo by Kelly Sikkema on Unsplash

Here’s how it works:

  1. List all your debts from smallest to largest, regardless of interest rate.
  2. Make minimum payments on all debts except the smallest one.
  3. Focus on the smallest debt—throw every extra penny at it until it’s gone.
  4. Once the smallest debt is paid off, roll that payment into the next smallest. Repeat until you are debt-free.

Example:

  • £200 credit card balance
  • £1,000 car loan
  • £5,000 home improvement loan

With the Debt Snowball, you start by knocking out that £200 credit card debt. It’s quick, satisfying, and gives you the boost you need to tackle bigger debts. Once that’s done, you move on to the next one with more cash in your hand, like a financial snowball gathering speed.

Why does it work?

Because we people are emotional creatures.

We feel good about ourselves when we see progress—no matter how small. And when we feel good, we are more likely to stick with it.

Pros:

  • Provides quick wins that keep you motivated.
  • Helps build momentum as you eliminate smaller debts quickly.

Cons:

  • Might cost more in interest over time because you’re ignoring those higher-interest debts for a while.

What is the Debt Avalanche Method?

The Debt Avalanche method is logical, efficient, and cares less about feelings than it does about saving you money.

debt avalanche

Photo by Angelo Burgener on Unsplash

Here’s how it works:

  1. List all your debts by interest rate, from highest to lowest.
  2. Make minimum payments on all debts except the one with the highest interest.
  3. Focus on the highest-interest debt and direct every extra pound or penny toward it until it’s wiped out.
  4. Once that debt is gone, move to the next highest interest debt. Repeat until you are debt-free.

Example:

  • £5,000 credit card debt at 20% interest
  • £1,000 car loan at 10% interest
  • £10,000 student loan at 5% interest

With the Debt Avalanche, you start by attacking that high-interest credit card. Sure, the balance might be larger than some of your other debts, but focusing on the interest rate saves you money in the long run.

Why does it work?

Because debt is expensive. By prioritising high-interest debts, you minimise the interest you’re paying, meaning you can become debt-free faster overall.

Pros:

  • Saves more money on interest, especially if you have high-interest debt like credit cards.
  • Gets you out of debt quicker in the long term.

Cons:

  • Progress can feel slow at first, especially if your highest-interest debt is also your biggest balance.

Debt Snowball vs. Debt Avalanche: How to Choose the Right Debt Pay-Off Method for You

So, should you choose Debt Snowball or Debt Avalanche?

Well, it depends on two things: your personality and your financial situation.

Your Personality

Debt isn’t just about numbers. It’s emotional.

The Debt Snowball might be your best bet if you need to see results fast to stay motivated. Getting that quick win (or ten) can light a fire under you and keep you going when the road gets tough.

But if you have the mentality of a long-distance runner who gets satisfaction from knowing you’re saving the most money, Debt Avalanche might be your method. You’re willing to slog through the slow start because you know that in the end, it’ll pay off—literally.

Your Financial Situation

Look at your debts: Are you drowning in high-interest credit card bills? If so, Debt Avalanche is likely the smarter choice. It’ll save you more on interest and get you out of debt quicker, even if it doesn’t feel like you’re making progress immediately.

But if your debts are similar in interest rate or if you’re more motivated by quick wins, then the Debt Snowball could be a better fit.

The Hybrid Approach

Here’s a sneaky third option: combine both methods.

Start with the Debt Snowball to build momentum and crush those small balances first.

Once you feel more confident, switch to the Debt Avalanche to tackle those higher-interest debts and save yourself some money in the long run.

Best of both worlds!

Practical Tips for Staying on Track

Whichever method you choose, the key is sticking with it. Here are a few tips to help you stay focused and motivated:

  • Automate your payments: Set up automatic payments for your minimum amounts so you never miss one.
  • Celebrate small wins: Even paying off a single debt deserves a mini celebration—treat yourself (without using your credit card!).
  • Revisit your budget regularly: If you get a raise or bonus, funnel that extra cash toward your debts.
  • Track your progress: Use a debt tracker or an app to visually see your balances shrinking. It’s incredibly satisfying!
  • Side hustle: Use any extra money from side gigs or bonuses to supercharge your debt payoff.

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At the end of the day, the best debt payoff method is the one that works for you.

The Debt Snowball will keep you going if you’re motivated by quick wins. If you prefer saving on interest and getting out of debt faster overall, Debt Avalanche is the way to go. Or create your own hybrid plan!

Remember, becoming debt-free is a marathon, not a sprint. The most important thing is to start, stick with your plan, and celebrate every step you take toward financial freedom.

Now, what method will you choose? Share your thoughts or your debt payoff journey in the comments below!

Photo by Olga Iacovlenco on Unsplash

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