There are two ways to order your debts, and the argument between them has been going for years. The short version: avalanche costs you less, snowball is the one more people finish.
Both work. What does not work is paying a bit extra toward whichever balance is bothering you most this month, which is what happens when there is no order at all and no tracker on the fridge.
Below: how each method works, a worked example with real numbers, and two printable trackers you can use from this page.
How both methods work
Both start the same way: minimum payments on everything, and one extra amount that goes to a single debt. The only difference is which debt gets it.
| Snowball | Avalanche | |
|---|---|---|
| Order by | Smallest balance first | Highest interest rate first |
| Interest paid | More | Less |
| First win arrives | Quickly | Sometimes much later |
| Best when | You need to see progress to keep going | The rates differ a lot |
| Fails when | One debt has a much worse rate | The top debt is big and morale runs out |
A worked example
Say you owe four things:
| Debt | Balance | Rate |
|---|---|---|
| Store card | $600 | 26% |
| Medical bill on a payment plan | $1,400 | 0% |
| Credit card | $4,200 | 22% |
| Car loan | $9,000 | 7% |
| Order | Snowball | Avalanche |
|---|---|---|
| 1st | Store card, $600 | Store card, 26% |
| 2nd | Medical bill, $1,400 | Credit card, 22% |
| 3rd | Credit card, $4,200 | Car loan, 7% |
| 4th | Car loan, $9,000 | Medical bill, 0% |
The whole difference here is the medical bill. Snowball clears it second because it is small. Avalanche leaves it until last because at 0% it costs nothing to carry, and every dollar sent there instead of the 22% card is a dollar doing no work.
How to choose between them
A few questions that usually settle it faster than the arguing does.
- Are the rates close together? If everything is within a few points, avalanche saves very little, so the tie-breaker is whichever order you will stick with.
- Is one debt at a punishing rate? Then the interest difference is real money and avalanche is worth the wait.
- Have you started and stopped before? The method that gets finished beats the method that is cheaper on paper. Snowball exists because of this.
- Is anything at 0%? A genuinely interest-free balance goes last, whichever method you are running.
You can also mix them: clear one tiny balance first for the win, then switch to rate order for everything after it.
Printable debt tracker: the overview sheet
One line per debt. Fill it in once, order it, and put the order number in the last column. This is the sheet that tells you where the extra payment goes this month.
| Debt | Balance | Rate | Minimum | Order |
|---|---|---|---|---|
| Total |
Printable payment log: one per debt
The overview sheet tells you where the money goes. This one shows the balance falling, which is the part that keeps people going.
| Debt | Starting balance | ||
|---|---|---|---|
| Date | Paid | Interest | New balance |
Make the progress visible
Numbers on a sheet are easy to stop reading. Take the starting balance, divide it into a round number of chunks — a $4,200 card into 42 squares of $100 — draw the squares, and color one in per hundred paid.
It is the same information as the balance column, and it works far better, because a grid that is two-thirds filled is much harder to walk away from than a number that is two-thirds smaller. Put it somewhere you pass every day.
Four things that stall a payoff plan
- No buffer. Send every spare dollar at the debt and the next unexpected bill goes straight back on the card. A small cushion is not a distraction from the plan; it is what stops the plan going backwards.
- Updating only when it feels good. The months you do not want to write the number down are the months the tracker is doing its job.
- Changing the order mid-run. Switching methods usually means restarting the momentum, not keeping it. Pick one and let it finish.
- Not rolling the payment forward. When a debt clears, its whole payment should move to the next one on the list. If it quietly turns into spending money, the plan gets slower every time you win.
If you would rather wipe it than reprint it
A paper tracker gets reprinted every time a balance changes shape. A laminated card does not: fill it in with a wet-erase marker and update the number in place.
The laminated cards that fit a standard A6 budget binder are in A6 budget binder inserts.
Where to go next
The reason most payoff plans go backwards is a predictable bill nobody budgeted for. Sinking funds are the fix, and there are 30 categories in that post to work through.
And if the extra payment is the part you cannot find, the 100 envelope challenge is a way to build a lump sum out of small amounts without it feeling like another bill.
General information, not financial advice. Rates, terms and what makes sense for your situation vary, and a licensed advisor is the right person for the specifics.