Avalanche vs. snowball: which payoff method is better?
Math says one thing, human psychology says another. Both are right — pick the one you'll finish.
When you have multiple debts, you have to decide which one to attack first. There are two famous methods, and the 'best' one depends on whether you're optimizing for dollars or for momentum.
The avalanche method (math-optimal)
List all your debts. Sort by interest rate, highest first. Pay minimums on everything. Throw every extra dollar at the debt with the highest rate. When it's gone, move to the next. Repeat.
This saves the most money in total interest. In pure math terms, avalanche wins. Every time.
The snowball method (psychology-optimal)
List all your debts. Sort by balance, smallest first. Pay minimums on everything. Throw every extra dollar at the smallest debt. When it's gone, move to the next. Repeat.
This costs slightly more in total interest but gives you a win faster — you close an account in week three instead of month eighteen. For most people that early win is the difference between finishing and giving up.
Hybrid
Attack the smallest debt first for the psychological win, then pivot to avalanche once you've closed one or two accounts. You get momentum and math.
Put this into practice
Worth tracks your accounts, budgets, and goals — so the concepts in this article aren't just theory.
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