Paying Off Debt by Using the Snowball or Avalanche Method

Let’s talk debt reduction strategies! There are many ways to approach paying off your debts, especially if you have multiple forms of debt. Two popular debt reduction methods are the snowball method and the avalanche method.

The snowball method refers to the practice of paying off your smallest debt first while making your minimum payments on your others. Once the smallest debt is paid off, you work towards the next smallest, acting like a “snowball” as you continue rolling payments into bigger and bigger debts. This helps you feel rewarded each time you pay off debt since you can see your progress relatively quickly.

The avalanche method refers to paying off your highest-interest debt first while making your minimum payments on your others. Once that is paid off, you work towards paying off the next-highest interest debt, and so on. You may save money over time since you are addressing the higher-interest debts first.

Depending on your financial situation, one method may be better suited for your goals.

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