Once you have a budget and a little extra to throw at debt, the next question is which debt to attack first. Two methods dominate, and the right one depends as much on your psychology as your math.
The debt snowball
With the snowball, you list your debts from smallest balance to largest, ignoring interest rates. You make minimum payments on everything, then throw every spare dollar at the smallest debt until it is gone.
- Pay off the smallest balance first
- Roll that payment into the next-smallest
- Each payoff frees up more money and momentum
The magic here is motivation. Knocking out a whole debt quickly gives you a real win, and those wins keep you going.
The debt avalanche
The avalanche orders debts by interest rate, highest first. You attack the most expensive debt while paying minimums on the rest.
- Target the highest-interest debt first
- Save the most money on interest overall
- Mathematically the fastest, cheapest route
The downside is that your biggest, most discouraging debt might also carry the highest rate, so early wins can feel slow.
Which should you choose
If you are motivated by numbers and want to pay the least, choose the avalanche. If you have tried before and lost steam, choose the snowball. The difference in total interest is often smaller than people fear, and the best method is the one you finish. Pick one today and start this month.