Debt-Free Journey: Which Method Is Right For You (Snowball vs Avalanche)?

Debt-Free Journey: Which Method Is Right For You (Snowball vs Avalanche)?

With interest rates fluctuating – a situation unlikely to change any time in the near future – and the global financial picture far from settled, the idea of rolling debts over for years on end is fast coming to an end. Even those who traditionally relied on credit – and we’re thinking here particularly of the younger generations – are now thinking in terms of paying off debts in order to build a more financially stable debt-free future. 

So read on for how you can best pay off your debts and which method is best for you. The two most popular debt payoff methods – avalanche and snowball – are designed to achieve the same goal. They both offer freedom from debt – but using slightly different strategies. Deciding between the two methods depends on your financial situation and your personality. For a cautious saver, the debt avalanche method is a wise choice. However, someone highly motivated to achieve fast results would do better with the debt snowball.

The Snowball Method

This involves paying off your smallest debts first, regardless of whether the interest rate is higher than your other debts, while still making minimum payments on larger debts. Once the smallest debt is paid off you roll the amount you were paying onto the next smallest debt.This method can provide motivation as you see the number of your debts gradually disappearing.

Pros and Cons of the Snowball Method For Debt Free Living


• The quick win of the disappearing debt gives you a boost and encouragement.

• Easy to manage your debts according to balance rather than by interest rate.


• You won’t be saving on interest payments initially.

The Avalanche Method

This involves paying off debts which have the highest interest rates first while still making minimum payments on your lower-interest debts. This approach can save you money in the long run because you will be targeting debts with the highest costs but it may take longer for you to see real progress. As with the snowball method, once you have eliminated the debt with the highest interest rate you can move on to the one with next highest interest rate.

If you don’t need the security or motivation of seeing debts disappear quickly and are content just to know that they are going down the avalanche method may be for you.

Pros and Cons of the Avalanche Method


• With the interest you save you will see the benefit as your finances stabilise.

• While this may be a slower way to pay off debts you will have the peace of mind in knowing that this option will mean your savings accounts build over time.


• If it takes a long time to pay off your first debt you may find it hard to stay motivated.

• Other factors such as variable interest rates may come into play which could impact how quickly you can pay off the debts.

Ultimately, deciding which method is better for you comes down to your ability to maintain discipline in your repayment plans and what will best motivate you – saving money or getting rid of your debts.

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