Which is better, Debt Snowball or Debt Avalanche?

Neither method is universally "better"; the optimal choice depends on your personal psychology and financial situation. The Debt Avalanche is mathematically superior, saving you the most money in interest. The Debt Snowball is psychologically superior for many, providing quick wins and motivation, which can lead to higher adherence rates and overall success in becoming debt-free.

How much money does Avalanche save over Snowball?

The amount saved varies significantly based on the total debt, the number of debts, and the range of interest rates. In our example with $30,000 across five debts, the Debt Avalanche saved approximately $1,200 in interest compared to the Debt Snowball. For larger debts or wider interest rate disparities, the savings can be several thousands of dollars.

What is the Debt Snowball method?

The Debt Snowball method is a debt repayment strategy where you list your debts from the smallest balance to the largest. You make minimum payments on all debts except the smallest, to which you apply all extra funds. Once the smallest debt is paid off, you roll its payment amount into the next smallest debt, creating a "snowball" effect.

Can I switch from Snowball to Avalanche?

Yes, you can absolutely switch from the Debt Snowball to the Debt Avalanche, or vice versa, at any point. Many people find success by starting with the Debt Snowball to build momentum and motivation, and then transitioning to the Debt Avalanche once they feel confident and committed to the process. This hybrid approach can offer the best of both worlds.

Is the Debt Snowball method always more expensive?

Mathematically, yes, the Debt Snowball method will almost always result in paying more interest than the Debt Avalanche method because it doesn't prioritize the highest interest rates. However, the "cost" of the snowball can be offset by its psychological benefits, as it may increase your likelihood of actually sticking to a plan and becoming debt-free, which ultimately saves you more than doing nothing.

Does Dave Ramsey recommend the Debt Avalanche?

No, Dave Ramsey is a strong proponent of the Debt Snowball method. He argues that personal finance is more about behavior than math, and the psychological wins from paying off small debts are crucial for long-term success in debt elimination.

How do I start paying off debt?

To start paying off debt, first list all your debts, including balances, interest rates, and minimum payments. Next, choose a strategy (Snowball or Avalanche). Then, create a budget to find extra money to put towards debt, and commit to consistently making more than the minimum payments on your chosen target debt. [Learn more about how to get out of debt](/personal-finance/how-to-get-out-of-debt).

Debt Snowball vs. Debt Avalanche: Which Debt Strategy? |…