💸 The Best Way to Pay Down Debt: Avalanche vs Snowball Method
The first step to improving your financial wellbeing is to pay down debt, but it can feel overwhelming — like a never-ending game of financial whack-a-mole. But the good news? There is a strategy (actually, two) to help you take control, stay motivated, and get debt-free faster.
Let’s break down the Avalanche and Snowball methods — two tried-and-tested ways to tackle debt that actually work.
🧊 What is the Avalanche Method?
Think of this like the logical, numbers-first approach. With the avalanche method, you list all your debts and pay off the one with the highest interest rate first, while making minimum payments on the rest.
🔢 How it works:
- Make a list of your debts — include balances, interest rates, and minimum payments.
- Focus any extra cash on the debt with the highest interest rate (e.g. 24% credit card).
- Once that’s cleared, move to the next highest interest rate.
- Rinse and repeat.
✅ Benefits:
- You pay less overall in interest.
- It’s mathematically the fastest and most efficient way to get debt-free.
- Great if you’re motivated by saving money long-term.
❄️ What is the Snowball Method?
This one’s about momentum. With the snowball method, you pay off the smallest debt first, regardless of interest rate. Once that’s gone, you move on to the next smallest — and so on.
🔁 How it works:
- List your debts from smallest to largest balance.
- Put all extra money toward the smallest debt.
- Once it’s paid off, roll that payment into the next smallest.
- Keep going until you’re debt-free.
✅ Benefits:
- Builds quick wins and momentum.
- Helps you stay motivated as you see debts disappear fast.
- Great for people who need a psychological boost.
💥 Which Method is Better?
Both are solid — it just depends on you.
| If you value… | Go with… |
|---|---|
| Paying the least interest | Avalanche Method |
| Staying motivated early on | Snowball Method |
Still unsure? Some people start with snowball to build momentum, then switch to avalanche once they’ve built confidence. That’s a totally valid hybrid!
💡 Bonus Tip: Automate Your Payments
No matter which method you choose, set up automatic payments for minimums, and funnel any extra toward your target debt. This way, you stay consistent and avoid late fees.
📈 Quick Example
Let’s say you have:
- £500 on a store card at 21%
- £1,200 on a credit card at 18%
- £4,000 on a loan at 9%
Snowball: You’d pay off the £500 first. It’s the smallest and quickest win.
Avalanche: You’d start with the store card (highest interest), then the credit card, then the loan.
🧭 Final Thoughts
There’s no one-size-fits-all. The best method is the one you’ll stick to. Whether you want quick wins or maximum savings, the key is to start — and stay consistent. This is how you pay down debt.
👉 Want help working out which method is right for you? Join the Smart Pounds newsletter for free and get articles straight to your inbox.