Getting out of debt can be overwhelming for many of us. If you feel trapped by debt and don’t know where to begin. Don’t fret! Finding a repayment strategy that works for you can make all the difference when tackling your debt.

In this guide, you will learn about two popular methods for paying off debt. Each one has its own approach, and you can choose the best one for you to tackle your debt.

Debt Snowball or Debt Avalanche: Which One Is For You

The two approaches for managing debt are the Debt Snowball and Debt Avalanche Methods. Both strategies can help you make great progress in becoming debt-free.

Debt Snowball Method

With this approach, you pay off your debts starting with the smallest balance first, then progress to the larger ones. You review all your debts and arrange them by amount owed, from smallest to largest.

Then:           

• You pay minimums on all debts but focus extra payments on the smallest first.
• Once the smallest debt is paid off, allocate the amount you were paying on it to the next smallest debt.
• Repeat until all debts are eliminated

Why it works

You accomplish a quick win. That first debt disappears fast, and now you’ve got more money to put toward the next one. It builds momentum for you to go on.

Imagine you owe:

• $500 on a credit card at 18%
• $2,000 on a personal loan at 10%
• $5,000 on a car loan at 6%

Start with that $500 card. Pay this card first, then tackle the $2,000 loan next, and so on.

Benefits of the Snowball Method:

• Quick psychological wins. Paying off the smallest debt quickly builds confidence.
• Motivations stay high. Each success fuels your momentum.

Great for people who struggle to stay on track in the long term.

Best used when: You need consistent motivation and thrive on seeing quick, visible progress.

Debt Avalanche Method

The Avalanche tackles the most expensive debts first, those with the highest interest rates, so you save the most money over time.

Here’s how it works:

• List your debts from the highest interest rate to the lowest.
• Make minimum payments on all debts, but focus extra payments on the one with the highest interest rate.
• Once it’s gone, move to the next highest rate.

Example:

Credit Card A: $500 balance, 18% interest

Credit Card B: $1,200 balance, 15% interest

Car Loan: $8,000 balance, 6% interest

With Avalanche, Credit Card A (18%) remains the top priority because it’s the most expensive. However, in another scenario, a larger balance with a higher interest rate would take precedence even if it means waiting longer for the first payoff.

Benefits of the Avalanche Method:

• Saves money on interest. You pay less over time.
• Gets you debt-free faster if you stick to the plan without interruption.
• Perfect for people focused on numbers rather than emotional wins.

Best used when: You have the discipline to keep going even if it takes longer to see the first debt eliminated.

Combining Strategies

Some people combine the two: They start with the Snowball method for the first two or three debts to build confidence, then switch to Avalanche to maximize interest savings.

 Debt Snowball or Debt Avalanche: Best Strategy To Pay Off Debt

Debt Snowball If……

• Motivating yourself means seeing fast results, even if it’s not the most cost-efficient.
• You’re juggling numerous small debts, and closing them out feels rewarding.
• When you have high debt, keeping up momentum is tough, and you know you’ll stick with the plan when you see the smallest debt disappear quickly.

 Debt Avalanche if……

• You prefer saving the most money in the long run, even if it takes longer to see the benefits of account closures.
• You’ve got major debts with high interest rates (credit cards over 15% APR).
• You’re confident you’ll stay on track even if the process is slow at first.
• Paying less interest over time is your top priority.

Either way………

• Make a list of all your debts, including balances and interest rates.
• Always pay minimums on all debts, but focus extra payments on your target debt.
• Revisit your decision as your circumstances change; switching methods is always an option.
• The best plan is the one you can consistently follow over time.

Monthly Debt Repayment Checklist

Step 1: List All Debts

Write down every debt you owe (credit cards, loans, etc.) with these details:

• Lender name
• Current balance
• Interest rate
• Minimum monthly payment

Step 2: Track Your Income & Expenses

• Calculate all monthly income.
• List fixed and variable expenses.
• Determine how much you can put toward debt each month (above minimums if possible).

Step 3: Choose Your Repayment Method

• Decide: snowball (smallest balance first) or avalanche (highest interest first).
• List debts in target payoff order based on the method.

Step 4: Make Payments

• Pay at least the minimum on every debt.
• Pay extra toward your current target debt.
• Set up automated payments, if possible, to ensure you never miss a due date.

Step 5: Monitor Progress

• At the end of the month, update each debt’s balance.
• Check that all payments were posted as expected.
• Celebrate small wins, note when you pay off a debt.

Step 6: Adjust If Needed

• Review your budget monthly and adjust it for changes in income or expenses.
• Re-evaluate your strategy if motivations or finances change.
• Shift freed-up money from paid off debts to the next debt in line.

Step 7: Plan For The Next Month

• Double-check any new charges and avoid adding to your existing debt.
• Recalculate repayment plans if you get extra money (bonuses, tax refund).

Debt payoff takes time. Regardless of the method you use, remain consistent and persevere. Choose your method, create a list, and commit to making those extra payments until each of your debts is paid off.

Check out this article: https://masteringpersonalfinances.com/preventing-future-debt/