The avalanche method: minimize interest
Avalanche pays the minimum on every debt, then puts every extra dollar toward the debt with the highest interest rate first. Mathematically, this is the cheapest way to become debt-free — every dollar above the minimum is working against the balance costing you the most.
The snowball method: build momentum
Snowball pays the minimum on everything, then targets the smallest balance first regardless of interest rate. It usually costs more in total interest, but it produces a payoff faster — a real account hitting zero — which keeps motivation alive when there are five or six debts to clear.
How to actually choose
If the interest-rate gap between your debts is small, snowball's motivation boost usually outweighs the minor interest cost — pick it. If one debt carries a rate dramatically higher than the rest, avalanche's savings become large enough to be worth the slower first win. A practical middle ground: clear one tiny balance first for an early win, then switch to avalanche for the rest.
A worked example: $200 extra a month
Picture three debts: a $600 store card at 26% APR, a $3,200 personal loan at 11%, and a $9,000 car loan at 6%. With avalanche, the extra $200 goes to the store card first — at 26% it's the most expensive debt by far, even though it's the smallest balance, so the two strategies happen to agree here. Once that's cleared, avalanche moves to the personal loan next because 11% beats 6%, even though the car loan's balance is bigger. Snowball would make the same first move, then jump to whichever balance is smaller next — in this case the personal loan again, since $3,200 is smaller than $9,000. The two methods often agree on the early moves; they diverge most when a high-balance debt also carries a high rate, or a small balance carries a low one.
A payoff plan you can build this week
- List every debt with balance, interest rate, and minimum payment.
- Sort by your chosen method (smallest balance, or highest rate).
- Pick one extra-payment amount you can sustain for at least 3 months.
- Apply all of it to the top debt; pay minimums everywhere else.
- When one closes, roll its full payment into the next debt.
Staying on track when motivation dips
A payoff plan rarely fails because the math was wrong — it fails because three months in, the extra payment quietly stops happening.
- Automate the extra payment the same day it's due, not "whenever there's some left over."
- Write the next debt's name somewhere visible — a sticky note, a phone wallpaper — so the next target is never a question.
- When a debt closes, treat the freed-up payment as already spoken for, not as new spending money, even for one month.
What if there's no extra payment yet
Not having room for an extra payment doesn't mean the plan waits — it means step one is freeing up the room. List the debts and pick the method now, even at $0 extra, so the order is already decided the moment any extra money shows up, whether that's from a raise, a side gig, or trimming a subscription. Acting on a plan that's already written takes far less willpower than building one from scratch under pressure.
How Moneux shows the path
Moneux's Debt screen lists total debt and a category breakdown, and the Payoff timeline shows the order and estimated finish date for whichever strategy you choose — so the plan above isn't a spreadsheet, it's something you check.
Watch your payoff timeline move
Moneux's Debt and Payoff timeline screens show total debt, due dates, and the path to zero in one view.