Debt Snowball vs. Debt Avalanche: Pick Your Debt Strategy

Dealing with debt on your own can be difficult, but it can certainly be done. The two most popular methods to tackle debt without third-party assistance, are the snowball and the avalanche methods, each with its own set of advantages and considerations.

Debt Snowball Method

The “Snowball Method” is a debt repayment strategy that focuses on paying off the smallest debts first while making minimum payments on larger ones. The idea behind this approach is to gain psychological momentum by experiencing quick wins as smaller debts are eliminated. By eliminating these smaller debts first, you can free up additional funds to apply to the larger debts as you move along. This method can provide a sense of achievement and motivation, which can be particularly helpful if you struggle with debt-related stress. Check out this link for a guide.

Avalanche Method

In contrast, the “Debt Avalanche Method” prioritizes paying off debts with the highest interest rates first, regardless of their size. This method can save you more money in the long run because it minimizes the interest accrued. By focusing on high-interest debts, you reduce the overall cost of your debt over time. However, it may take longer to experience the emotional satisfaction of eliminating individual debts compared to the snowball method. Here is a great resource if you want to try this method.

The choice between these methods ultimately depends on your financial goals and psychological preferences. If you prioritize quick wins and emotional relief, the snowball method might be more suitable. If your primary focus is saving money on interest in the long term, then the avalanche method could be the better option. Whichever method you choose, it’s crucial to create a budget, stick to it, and make consistent payments to make progress in your debt repayment journey. Schedule a financial review session with one of our experts, to help decide on a budget, and a method of repayment. We can also explore what an organization like Apprisen can do to assist you with debt repayment.