By Anthony Santos
If you have more than one debt, the question isn't only "how much can I pay?" It's also "which one do I pay first?" The two most common answers are the debt snowball and the debt avalanche. Both work. They just reward different things: one gets you quick wins, the other saves the most money.
Below, I'll run the same set of debts through both methods so you can see the actual trade-off in dollars and months. Then I'll show you how to set up a simple Google Sheet to track whichever plan you choose.
With the snowball, you list your debts from smallest balance to largest, ignoring interest rates. You pay the minimum on everything, then throw every extra dollar at the smallest balance. When it's gone, you roll its payment into the next-smallest debt, and so on. The payment "snowballs" as each debt disappears.
The Consumer Financial Protection Bureau (CFPB) describes the upside plainly: you see progress quickly. The downside is that you "may end up paying more in the long run" because you aren't targeting the most expensive debt first (CFPB, How to reduce your debt).
With the avalanche, you list debts from highest interest rate to lowest. Same mechanics: minimums on everything, extra money to the top of the list, then roll the payment down. The CFPB calls this the "highest interest rate method" and notes it "can save you money in the long run," even if it doesn't feel fast at first.
Here's a made-up but realistic household. The numbers are for illustration only.
| Debt | Balance | APR | Minimum payment |
|---|---|---|---|
| Store card | $650 | 19.99% | $25 |
| Credit card | $4,200 | 24.99% | $105 |
| Personal loan | $2,800 | 11.99% | $95 |
| Car loan | $6,500 | 6.90% | $215 |
| Total | $14,150 | $440 |
This person can put $540 a month toward debt: the $440 in minimums plus $100 extra. Interest is calculated monthly (APR ÷ 12), and the budget stays at $540 the whole time.
Store card → Personal loan → Credit card → Car loan
Credit card (24.99%) → Store card (19.99%) → Personal loan → Car loan
In this example, the avalanche saves roughly $355 in interest. Both plans finish in the same month. The real difference is when you get your first win: month 6 with the snowball versus month 27 with the avalanche. That's more than two years of grinding on one big credit card balance before anything gets crossed off.
For some people, $355 is worth that wait. For others, a paid-off account in month six is exactly what keeps them from quitting in month seven. Your numbers will be different, so it's worth running your own.
Choose the avalanche if: - You have one debt with a much higher rate than the rest (a big credit card balance is the usual culprit; the Federal Reserve's G.19 consumer credit release shows average rates on credit card accounts assessed interest above 20%). - You're motivated by math and can stay patient. - Your balances are fairly similar in size, so the snowball wouldn't give you a quick win anyway.
Choose the snowball if: - You've started payoff plans before and stalled. - You have several small balances you could clear in a few months. - The interest rates are close together, so the cost difference is small.
A middle path: some people knock out one tiny balance first for a quick win, then switch to avalanche order for the rest. There's no rule against it. The best plan is the one you'll still be following a year from now.
You don't need an app. A blank Google Sheet and four formulas will do it.
Make columns for Debt (A), Balance (B), APR (C), and Minimum (D), one row per debt starting in row 2. Format column C as a percent.
In an empty area, use the SORT function:
=SORT(A2:D5, 2, TRUE) (balance, smallest first)=SORT(A2:D5, 3, FALSE) (APR, highest first)In column E: =B2*C2/12. This shows roughly how much interest each debt adds this month. It's a good gut check; seeing $87 next to the credit card tends to settle the "which one first" debate fast.
In column F, use NPER: =NPER(C2/12, -D2, B2). For the credit card above at minimum payments only, =NPER(24.99%/12, -105, 4200) returns about 87 months, over seven years. Change the payment to the amount you're actually sending, and watch that number drop.
Add a tab with one row per month: date, each balance, and total paid. Plug in your real statement balances rather than projections. A simple line chart of the total balance is all the motivation dashboard you need.
The avalanche usually costs less interest, which can shorten the timeline slightly. In many real cases, like the example above, both finish in about the same month. The snowball gets you to your first payoff faster.
Yes. Your spreadsheet makes it easy: change the SORT formula and keep going. Just don't switch every month.
Most people leave the mortgage out and focus on consumer debt. Federal student loans have their own repayment options, so check StudentAid.gov before treating them like a credit card.
Then neither method is the next step. Contact your creditors first, and look at the CFPB's free debt reduction worksheet or a reputable nonprofit credit counselor.
Example figures are hypothetical and simplified (fixed APRs, no new charges, interest compounded monthly). This article is general information, not financial advice.
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