Debt Snowball vs Avalanche

George Kamel is a personal finance expert and co-host of The Ramsey Show. Following Ramsey’s proven money plan, George went from negative net worth to a millionaire in under 10 years. His goal is to help people spend less, save more, and avoid money traps so they can live a life with more margin, options and freedom.

This channel will simplify complex money topics, bust money myths with actual facts, and debunk the stupid financial advice you're seeing in your social media feed. All with a healthy dose of pop culture, humor, and snark.

[pauleff]

Why the snowball is best for those currently in debt is because it is the behaviour. If there had already been financial discipline, no debt would exist in the first place

[DebZaragoza]

Yes! This helped me eliminate $30, 000 worth of credit debt from 2020-2022! So motivating!

[BravoFan]

It gives you quick victories. As Dave has said many times in Financial Peace University, you finish a little one, it gives you hope and motivation to finish the next. The light at the end of the tunnel with the debt snowball works so much better than trying to tackle a much bigger debt that feels like it never ends.

[LadydogC]

The plus is you see your accomplishments faster when you do small bills first. Which then gives you drive to get after the larger ones. This is the best way.

[GardenMinistry.]

I did the debt snowball 10 years ago, and I can conffirm it works!! Going 10 years strong with no debt! Thank you Dave Ramsay!

[amandadean]

I did the debt snowball. It works-it’s mentally rewarding the first time you pay off something and gives you the confidence to keep going.

[alexpietsch]

What cracks me up is my friends who argue against the snowball method.

When I sit with them and write out their debts

1 the list was literally identical either way.
1 had so many things on buy now pay later that the snowball method gets her out of debt 6 months faster.
1 would payoff faster with the avalanche by 1 biweekly paycheck.

[christeenrenay]

Lol no sir we did not do the math. Can confirm 😂

[ricksanchez]

Getting the small wins and eliminating payments motivates you to continue. That motivation gets you to focus on the problem and that’s when the magic happens

[bellad]

🥴🥴🥴🥴 if we were doing math, we wouldn’t be in debt. White flag 🏳️ 😂😂😂

[naekkischlumpf]

Since I had 3k in loans from the bank and 5.5k personal loans (it went all into education)
I did an alternated version of the debt snowball, first my employer, than distant relatives, bank and lastly close family. My family new my situation and the steps I took. My employer just needed to see the cash regularly each month (3 payments in total)
So, yes debt snowball but sorted in categories in importance.
Btw: debt free since last week in roughly 8months.

[TastyTrees]

This goes back to the behavioral rewards mechanism. Essentially like when you teach your dog a trick, they get a reward for completing the task initially until they learn to do it for just praise. You close out a debt, you get dopamine.

[KATHIESHOES]

It’s the idea of positive reinforcement. Small victories become larger ones🎉

[katiemcleod]

We had two debts that were less than $1k apart with a substantial interest difference, we went ahead and started on the higher interest one. After one large payment, it became the smallest debt so it worked.

[kathleenramirez]

We've been doing the avalanche method. But we went at it with the exact same discipline and aggression as we would have the snowball method. The behavior and decisiveness to never be in debt in any fashion ever again was already present, so it ended up saving us money in the end. Probably no more than $2k from the interest saved, but at the end of the day, money saved is money earned. While I wholeheartedly believe in the snowball method and ultimately recommend it before the avalanche method, particularly for those who have struggled with developing healthier financial habits, I would consider us an exception.

[thecrippledhandyman]

It does work. The snowball method. Now we plan on paying off our mortgage in 7 years. Balance is $429K

[devilhex]

Avalanche is better financially, no questions there. Snowball is better for increasing motivation as you see your debts disappear one by one. (Then again, if Credit card debt isn't your smallest debt, your finances are pretty much fucked up).

[nichtsistkostenlos]

I did kind of a cross between the two. If two debts were somewhat close to each other usually within a few thousand dollars, I'd pay the one with the highest interest, otherwise I'd just pay off the lowest balance. It helped me not be so annoyed that I'm paying too much interest, but also reap the psychological benefits of the snowball effect.

[raaltamirano]

I might be the rarity but the Avalanche worked for me. I was $95k in credit card debt and now debt free.

[jamescampbell]

In the end its going to depend on your unique situation. Let's say you have 20k on a CC at 22%. All your other debts are much smaller and at a lower interest rate. Its that 22% on that 20k that is keeping you in debt, not the smaller debts.