✨ Featured Lessons · Lesson 42 of 54 · 75 sec
Snowball vs Avalanche, Picked For You
❄️ Two people, the same three debts, the same monthly payment. One pays about $600 less in interest and finishes a couple of months sooner. They didn't earn more or spend less — they just picked a different debt to attack first. Here's how to pick yours in 30 seconds.
💡 Key idea
The 'best' method is the one you'll actually finish.
🧠 Why it matters
AVALANCHE = pay highest INTEREST RATE first (cheapest mathematically). SNOWBALL = pay smallest BALANCE first (cheapest emotionally). Pick avalanche if you're disciplined. Pick snowball if you need quick wins to stay motivated.
🌍 In the real world
💳 You have: $500 store card at 28%, $2,000 medical at 0%, $8,000 car at 7%. Avalanche: store card → car → medical. Snowball: store card → medical → car. Avalanche saves ~$600 in interest. Snowball gives you a 'debt killed' win in month 2.
📌 Takeaways
- Avalanche = math winner
- Snowball = motivation winner
- Either beats minimum payments forever
✅ Test yourself
You have 4 debts. You hate budgeting and quit things easily. Which method fits?
- Avalanche
- Snowball
- Random
- Just pay minimums
Answer: B · Snowball
Snowball gives early wins that keep you in the fight. Behavior > math here.
What do BOTH methods require?
- A balance transfer
- Paying minimums on everything + extra on ONE target
- Closing accounts
- A loan consolidation
Answer: B · Paying minimums on everything + extra on ONE target
Both methods: minimums everywhere, then dump every extra dollar on ONE target until it dies. Then roll that payment onto the next.
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