Uploaded March 2025 | Updated September 2026, 2 weeks ago
There are two primary methods for getting out of debt, snowball and avalanche.
They differ in that snowball starts with the smallest debt amount and the theory is that you will get a quicker positive reinforcement that what you are doing is working. However, snowball will leave you paying more in interest over time compared to avalanche. Snowball became really popular as the method Dave Ramsey suggests people use (he does also mention avalanche but says snowball is easier for most people to accomplish).
The avalanche method is based on sorting your debts by how much interest you are paying each month on that debt, then finding the one with the highest interest amount and paying it off first. Its advantage is that over time you could pay thousands less compared to snowball. Its disadvantage is that it takes longer to get that positive reinforcement that all your hard work is actually working.
If you own a home, you are almost always paying your mortgage as the highest interest item each month. So an alternate method of avalanche, is to sort all of your debt by highest interest paid each month and excluding your mortgage from that list. That is the method I chose and the positive reinforcement happens much faster this way. Once all my other debts were paid off, then I focused on the house/mortgage.
Now that you know the two primary methods, I will go over an easy way to determine how quickly you can get out of debt using each method using some random data to populate a spreadsheet which will become a very helpful tool.
There are two primary methods for getting out of debt, snowball and avalanche.
They differ in that snowball starts with the smallest debt amount and the theory is that you will get a quicker positive reinforcement that what you are doing is working. However, snowball will leave you paying more in interest over time compared to avalanche. Snowball became really popular as the method Dave Ramsey suggests people use (he does also mention avalanche but says snowball is easier for most people to accomplish).
The avalanche method is based on sorting your debts by how much interest you are paying each month on that debt, then finding the one with the highest interest amount and paying it off first. Its advantage is that over time you could pay thousands less compared to snowball. Its disadvantage is that it takes longer to get that positive reinforcement that all your hard work is actually working.
If you own a home, you are almost always paying your mortgage as the highest interest item each month. So an alternate method of avalanche, is to sort all of your debt by highest interest paid each month and excluding your mortgage from that list. That is the method I chose and the positive reinforcement happens much faster this way. Once all my other debts were paid off, then I focused on the house/mortgage.
Now that you know the two primary methods, I will go over an easy way to determine how quickly you can get out of debt using each method using some random data to populate a spreadsheet which will become a very helpful tool.
