Snowball? Avalanche? or Neither? Which is the Best Debt Payoff Strategy For YOU? Maybe Neither!

There are many ”expert” methods out there to help you tackle you debt. The two biggies being the ”Snowball” and ”Avalanche” methods but there are other, unique, methods too. We listen to other people all too often not looking at our own situation and analyzing it. Experts try and tell us that their method is the best and we listen to them. We, as a society, don’t question things enough.

Snowball Debt Repayment

This method, probably made most famous by Dave Ramsey, suggests organizing your debt payoff in such a way that you pay them off according to size from smallest amount to largest. The logic being we gain debt payoff momentum and are more encouraged to continue on in our efforts when we see results and gain the satisfaction of paying things off. The big drawback to this method being you could likely end up paying more in interest since interest rate isn’t taken into consideration when prioritizing.

If you’re the type of person who gets excited about paying something off in full (rather than just paying a balance down) this method will likely work well for you.

Avalanche Debt Repayment

Interest rate is taken into consideration with the repayment option. Organizing your debt from highest interest rate to lowest and start repayment accordingly. This method ensures you’re debt free and paying while paying the least amount of interest.

To me this method makes the most sense. While I understand the logic behind momentum gained with the snowball method, if you were to calculate potential interest paid between the two one may be inclined to switch methods.

Which is Best For Me?


Snowball doesn’t work for me because I lose thousands in interest and I like the idea of paying as little as possible, as fast as possible.

Avalanche doesn’t work for me because my highest interest rate loan offers me a tax discount come April and my lowest interest rate loan is effecting my credit score so I want it eliminated ASAP.

Every debt repayment strategy needs to be personal and while both of these methods make sense in their own ways I need to look at my situation and realize that neither is exactly appropriate and guess what experts? I’m Ok with that. I’m Ok with not listening to your ”expertise” and I’m Ok with doing what is best for my family’s fiances. You should be Ok with challenging experts too.

We tend to get lost in hype over stuff. Again I will reiterate that both of these methods are good and the main goal of debt freedom is priority but it’s important that we don’t forget that they’re not the only ways though. If something someone else is doing doesn’t work for you, don’t do it, it’s just that simple. I’m going against the grain. I’m currently working on paying off one of the loans that offers me an income tax deduction because it’s like a thorn in my side and I want it gone. Then I will likely shift my financial efforts over to the 0% interest loan because it pisses me off. I don’t care that it’s 0% and I have 5.5% interest loans as well.

It doesn’t matter how much I write, you’ll need to develop your own basic understanding of debt payoff strategies. A good place to start would be to pick up a copy of Dave Ramsey’s The Total Money Makeover It will give you a good basis for understanding debt payoff strategies. The book is hugely popular, its sold something like 4 million copies and changed hundreds of thousands of lives.

I’m paying off our debts according to how much the annoy me, not what the experts say. How are you working on your goals? Any other rebels out there?

Enjoy Plunged in Debt?


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  1. Actually, I never had a huge debt, but for me being consistent in paying the debt would really work well. I remember my in-laws before when she was paying their car loan, she used the snowball debt repayment strategy and it really works well with her.

  2. Ouch! Paying the 0% interest before the 5% interest hurts my head but you know what you’re doing. The logic in me likes the avalanche method and that’s what I’ve been doing as my primary strategy with some exceptions also. For example, I have a mortgage that is at a lower rate than other mortgages, but it is small and due to renegotiate in 1.25 years. I want it gone exactly by that time, so I don’t have to renegotiate it or roll it in to the others. Just a practical / paperwork / hassle avoidance thing. So consequently, as soon as I have another debt paid in August, I will concentrate on wiping out this mortgage, but only to the extent that it ends when due, not a day before! Any other cash not needed for that will go against one of my other mortgages. Yup, I have 3!!

  3. I am mostly following the debt snowball method. Since I paid off my first (smallest balance) credit card this month, there are now 3 that are all very similar balances, but one has a higher interest rate. The higher interest rate of the 3 similar balances is the one I’ll be focusing on next. Sort of a combination snowball and avalanche. This is what it’s called “Personal Finance” and not “Follow the “Experts” Finance” 🙂

    On another note: I am finally caught up to current on your blog after reading from the beginning. 🙂

  4. This is exactly what I’m doing too! We need a name for it…

    I have 3 student loans with a co-signer and I’m doing whatever I can to pay those stupid things off as quickly as possible. I’m starting with the lowest balance just to show my co-signer we’re making progress. After that’s paid off, I’ll probably focus my extra payments onto the one with the highest interest rate (also has a higher balance). I hate these things so much!

  5. I think as long as you’re consistently paying off debt, any method is fine! It I had various sources of debt, I’d probably pay the higher interest ones first.

  6. I am a fan of doing whatever makes you happiest. As long as you’re making progress that’s all that matters. I agree that it’s smart to evaluate your own situation; you can’t blindly follow the advice of others. Just because something worked for them doesn’t mean it will work for you. Think for yourself! I only have two student loans. The smaller one happens to have a higher interest rate, which worked out nicely, so I’m paying that one off first.

  7. Paying off debt is a long, arduous and emotional process, but more than anything, it is a personal one and there is no one size fits all solution to it. I think as long as you are committed to it and working toward besting the problem, then that is all that matters.

  8. I wrote a post saying that your debt repayment process doesn’t matter. What does matter is the fact that you’re paying off debt. How you do it is up to you! I think working on the most annoying debts is a fantastic way to approach debt repayment.

  9. I think this is great Catherine! It can be so easy to get caught in the trap of thinking “you” have to follow a certain method. The key is that you’re paying it off and it works for you personally, not because someone preaches it’s the only way to do it. I sort of did a hybrid approach with my debt but largely went after the highest rate/most annoying cards first and worked from there.

    • Catherine says:

      Once this little loan is paid off I will likely reroute to highest interest rate but haven’t ruled out paying off the 0% loan second either.

  10. I’ve done a bit of a mixture. I’ve paying off a personal loan that is at 0% at a constant rate even though it doesn’t mathematically make sense. It will be gone by October while I’ll still have debt until July 2015. Yes I’m paying 5% on the debt that will be leftover after October, but I can’t leave the loan outstanding until the end. I just don’t feel right owing to someone rather than a financial institution.

  11. I see what the “experts” put out as a generic framework. Something to give a little bit of guidance, not necessarily a rule written in stone. I like the concept of the “debt snowball” method because it gives frequent “wins.” More importantly than theses early wins, I think, is the effect that each debt has on your life. For instance, If I owed the IRS money, I would pay them before a credit card. If I was being sued by someone, I might pay them first. If I owed a family member or friend money, I would put them ahead of everyone else. As long as you do what works for you and attack the hell out of it, run with it!

  12. I’d prefer the snowball method of debt payoff. I think the psychological boost you receive from paying off smaller debts first is more important and outweighs the money you might lose on the increasing interest of the higher debts. With that being said, to each his own. As others here have said, the important thing is to have a plan and do something based on your situation.

  13. Whenever we are paying things, we go by after-tax interest rate, unless there are other aspects, like you mentioned your credit score is affected by one of your loans.
    I love how you mentioned there are several different approaches and things to take into consideration. I don’t know if it’s the case for you, but for lots of people, the 0% rates are only for a limited amount of time and the cost to transfer a balance results in a fairly high fee. Paying things off when they are at 0% for a limited time means you can make a lot of progress, but if you don’t, those debts will cost you a lot in the future. Another case where paying things off in different orders makes sense is when the debt is a personal loan and it can affect your relationship with that person.


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