How to Pick Between Debt Snowball & Debt Avalanche

by | Nov 22, 2019

You’re educated on two great ways to pay off debt: Debt Snowball and Debt Avalanche. Now you have to make the choice about which one is actually the right fit for you. Don’t let the anxiety of having to make a decision paralyze you, because there’s some good news…

There is No “Wrong” Answer

Avalanche or snowball, it ultimately doesn’t matter because both are helping you reach your goal of debt freedom! Sure, debt avalanche means you’re going to reach that finish line with some extra money in your pocket because you paid less in interest, but that doesn’t mean it’s necessarily the right fit for you. 

Time to be Honest with Yourself

Sometimes in these debates about snowball vs. avalanche, there is a camp that gets really loud about how avalanche is obviously the right answer because it’s the one that saves you the most money. Really, whichever method actually works for you is the right one! 

You have to be honest with yourself. Are you going to be determined enough to keep pushing through with the debt avalanche method when it feels like there still isn’t much progress happening at first? Is the idea of paying less in interest motivation enough? Or do you know that using the debt snowball and getting a win faster is going to actually keep you on track?

Hybrid Method 

Still struggling about what to do? You could also design a hybrid method between snowball and avalanche — how about the moguls method?! Just trying to keep on with a snow theme here. 

There are multiple ways you can create a hybrid method. 

Perhaps you decide you want to debt snowball, but there is just one of your debts that irks you the most. Even though it’s not your absolute smallest, you just desperately want to knock that one out first. That’s fine — move it to the top of your list and the sheer hatred of that debt will be motivation to keep trucking, even though it’ll take a little bit longer than your smallest debt. 

Or maybe you want to do the avalanche method but you secretly know getting a quick win up top would be so pleasurable, so you go ahead and sneak a small student loan to the top of the list before properly avalanching the rest of your debt. 

Finish Strong by Evaluating How You Ended Up in Debt 

Crushing all your debt is a liberating feeling, but for some, it’s fleeting and quickly followed by amassing more debt. It’s important you continue to be honest with yourself and think about how you ended up in debt in the first place. Maybe it’s student loans and a car loan, or even debts for things you really needed. But if it’s consumer debt (often financed on credit cards), the final part of this plan is to determine how you can avoid creating similar debt in the future. Maybe it means never carrying a credit card in your wallet or addressing your emotional spending triggers or building a budget that actually works for you. Charlie is here to help as an in-your-pocket accountability buddy. You aren’t alone in this. We just want to make sure that your success is long-lasting! 

If you are struggling with credit card debt and want to maximize your monthly payments, a balance transfer could be a good fit for you. Click here to learn more.

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