Lesson 2 of 4 · 6 min read
Snowball vs. avalanche: two repayment strategies
One optimises the maths, the other optimises motivation. See which one suits your situation.
If you have several debts at once, the order in which you attack them matters. There are two established strategies, each with its own logic.
The avalanche method (mathematically optimal)
You pay the compulsory minimum on every debt, but put any extra sum toward the debt with the highest DAE. Once it is closed, you move on to the next most expensive one. It minimises the TOTAL paid in interest, and it is the right choice if cold figures motivate you.
The snowball method (motivationally optimal)
You pay the minimum on all of them, but put the surplus toward the debt with the SMALLEST REMAINING AMOUNT, whatever the interest. You close debts quickly and visibly, which builds psychological momentum. That is especially useful if you have failed with budgets before and need visible wins to stay motivated.
| Method | Optimises | Suited to |
|---|---|---|
| Avalanche | Total cost (maths) | People who stay motivated by figures, and are disciplined |
| Snowball | Motivation (quick wins) | People who need visible progress to keep going |
There is no “wrong” choice: a strategy you keep up consistently for 2 years beats an “optimal” strategy abandoned after 2 months.
In short
- Avalanche = attack the highest DAE first (mathematically optimal).
- Snowball = attack the smallest remaining amount first (motivationally optimal).
- The best strategy is the one you can keep up consistently.