How to tackle multiple debts
If you have more than one debt, the order you pay them off in matters a lot. Here's the strategy that saves you the most money.
🏔️ Avalanche Method
Target the debt with the highest interest rate first. Mathematically optimal — you pay the least total interest over time.
Saves the most money⛄ Snowball Method
Target the debt with the smallest balance first. You pay off debts faster, which builds motivation to keep going.
Best for motivation- 1List all your debts — write down every balance, minimum payment, and interest rate.
- 2Pay the minimum on all of them. Missing minimums triggers late fees and damages your credit score. Never skip a minimum.
- 3Find any extra money you can free up — even $20–$50/month makes a real difference. Cut one subscription, cook at home more, sell something unused.
- 4Put every extra dollar at your target debt — highest interest rate first (avalanche) or smallest balance first (snowball). Stay focused on one at a time.
- 5When a debt is paid off, roll that payment into the next one. If you were paying $150/month on a card and it's now gone, add that $150 to your next target. This snowballs fast.
Example — Avalanche in action
DebtRateMinimumExtra $
💳 Credit Card A24%$35/mo+ all extra
← Target this one first (highest rate)
💳 Credit Card B18%$25/mominimum only
🚗 Car Loan7%$280/mominimum only
🎓 Student Loan5%$180/mominimum only
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