🏔️ Debt Destroyer
Snowball (Psychology) vs. Avalanche (Math). Visualize your freedom.
Your Monthly Budget
Includes all Minimum Payments + Any Extra Money.
Your Debts
Avalanche Wins!
The Avalanche method saves you $4,000 in interest and clears debt 3 months faster.
Month-by-Month Breakdown
The Trend: The Debt Trap
Most people today aren't juggling just one loan. It's a combination: Credit Cards (high interest), Student Loans (large balance), and maybe a Car Loan. Managing multiple payments feels like a circus act, and without a plan, interest eats up your hard-earned money.
🤔 The Dilemma
You have $500 extra this month. Where should it go?
- Snowball Pay the smallest balance first. You get a quick "win" by eliminating a bill entirely. Great for motivation.
- Avalanche Pay the highest interest rate first. You save the most money mathematically. Great for your wallet.
⚖️ The Verdict
Our tool calculates both paths instantly.
Typically...
Avalanche is cheaper and faster.
Snowball feels better.
The Theory: Psychology vs. Math
🧠 The Psychology (Snowball)
Dave Ramsey and behavioral psychologists argue that debt is behavior, not math. By paying the smallest debt first, you get a quick "win". This releases dopamine, motivating you to stick to the plan.
🧮 The Math (Avalanche)
Financial experts argue that logic should rule. Mathematical optimization shows that paying off the highest interest rate first always results in the lowest total cost. Why pay 24% interest if you don't have to?
Real-World Case Studies
Case 1: The Credit Card Trap
Scenario: $15,000 Credit Card (24%) vs $5,000 Car Loan (6%)
In this high-interest scenario, the Avalanche method is the clear winner. By targeting the 24% debt first, you prevent the balance from ballooning. Choosing Snowball here (paying the 6% car loan first) would cost you thousands in extra interest on the credit card.
Case 2: The Student Loan Mountain
Scenario: $50,000 Student Loan (4%) vs $2,000 Medical Bill (0%)
Mathematically, the difference is small because interest rates are low. However, staring at a $50,000 balance for years is demoralizing. The Snowball method shines here—clearing the $2,000 bill quickly gives you a boost of confidence to keep going.
Frequently Asked Questions
Can I switch methods?
Absolutely. Many people start with Snowball to get a few quick wins and then switch to Avalanche once they are committed to the habit.
What about consolidation?
Debt consolidation can lower your average interest rate to 10-12%. If you have excellent credit, this beats the 24% Avalanche rate, but be careful not to run up the cards again!
Should I use my Emergency Fund?
No! Keep $1,000 to $2,000 as a Starter Emergency Fund. If you drain your savings and your car breaks down, you'll be forced to use credit cards, undoing all your hard work.
What about 0% APR promo cards?
Treat these as a "Mathematically Low" priority in Avalanche, BUT you must pay them off before the promo period ends. Otherwise, deferred interest might hit you all at once!
Does this apply to my Mortgage?
Generally, no. Mortgages have low interest and huge balances. Focus on "Consumer Debt" (Cards, Cars, Personal Loans) first. Investing strictly beats paying off a 3% mortgage.
What if I get a bonus or tax refund?
This is a "Snowflake"! Throw the entire amount at your target debt (smallest for Snowball, highest interest for Avalanche). It speeds up your timeline dramatically.