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BeginnerBudgeting4 min read
Paying Off Debt Fast: The Avalanche vs. Snowball Method
Having multiple debts feels overwhelming. These two strategies give you a clear, structured way out — pick the one that fits your personality.
- 1Avalanche method: pay minimums on all debts, throw extra cash at the highest-interest debt first. Mathematically optimal — saves the most money.
- 2Snowball method: pay off the smallest balance first regardless of interest rate. Psychologically powerful — quick wins keep you motivated.
- 3Studies show snowball users are more likely to stick with it. The "best" method is the one you actually follow.
- 4Always pay at least the minimum on every debt every month — missed payments damage your credit score.
- 5Credit card debt (20% APR) is almost always the worst — attack it before student loans or car loans.
- 6Never take on new consumer debt while aggressively paying off existing debt. Cut up the card if needed.
- 7A debt consolidation loan can lower your overall interest rate — but only if you stop using the credit cards you paid off.
- 8Once you're debt-free, redirect those payments directly into your TFSA. That habit is already built.