Debt Avalanche Method

June 26, 2018

Debt Avalanche, Debt Snowball & Debt Snowflake: Debt Payoff Strategies You Should Know

I’m Jessica and I’m a money expert, speaker, Accredited Financial Counsellor Canada®, host of the More Money Podcast, and am currently writing my first book with HarperCollins Canada (2025).
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Even though I’ve technically been blogging since December 2011, I haven’t written that much about debt in those 6+ years. Why? Because I’ve worked hard at paying off my student loan 9 months after graduating from university, and have remained debt-free ever since (except for my mortgage, which I don’t have any plans to pay off in a hurry). To you, this may seem like some major humble bragging, but honestly, it used to be a big sore point for me.

Having been part of the personal finance blogging community for so long, I felt like an outlier because I didn’t have a remarkable debt story to share like everyone else. I would never have some flashy headline that read “How this Girl Paid Off $50,000 in 2 Years!” because I’ve never experienced debt like that before. And because I was never in the thick of it like my peers, I felt like I didn’t have the right to talk about it.

Then I learned a very important lesson. You don’t have to experience something first-hand to be knowledgeable about it or have the expertise to teach others about it. This was something I learned once I became an Accredited Financial Counsellor Canada®. This is also something I want you to understand too. If you’ve never experienced debt yourself, but you understand the core principles of responsible credit use and how debt repayment strategies work, you 100% can help your friends and family if they are struggling with some debt issues. Or, you can forward them to me to join my financial counseling program where I help clients one-on-one with their financial issues.

To go over some of these strategies that I believe everyone should know (debt-free or not), in this post I’m going to go over the 3 most popular debt payoff strategies, then share some helpful resources to help you start paying off debt with a clear plan today.

Debt Avalanche

The Debt Avalanche method is hands-down the most commonly promoted strategy by financial experts, like Gail Vaz-Oxlade in her book Debt-Free Forever, because it makes the most logical sense and will save you the most money in the long run.

This strategy is all about creating a debt repayment sequence in which you focus on paying off your most expensive debt first (the debt with the highest interest rate), while continuing to pay the minimum payments on the rest of your debts. Once that first debt is paid off, then you’d move on to paying down your second most expensive debt, and so on until you are completely debt-free.

Here’s an example to show you what I mean. In the below table, there are 4 different debts with their interest rates and minimum monthly payments listed next to them. Using the Debt Avalanche method, you would focus on the debt with the highest interest rate first (in this case, credit card debt), then move on to the second most expensive debt (personal loan), then the third (line of credit), and finally the fourth and last debt (student loan).

Sequence Debt Type Balance Owing Interest Rate Minimum Monthly Payment
#1 Credit Card $3,000 20% $80
#4 Student Loan $10,000 5% $200
#3 Line of Credit $1,000 9% $18
#2 Personal Loan $5,000 10% $230

Just to make things super clear, what I mean by “focus on” is paying the minimum balance on your most expensive debt, then adding an extra sum of money to accelerate the amount of time it will take you to get your balance to $0.

Using the same example, you would pay your minimum payment of $80, plus an additional $300 (or an amount you can afford within your budget) every month.

The reasoning behind this strategy is that by paying off the debt with the highest interest first, you’ll be paying less overall interest, thus saving you a ton of money.

Although mathematically this makes the most sense, it’s not always the strategy that most people choose. Why not? Because personal finance isn’t just about math. There are also psychology and human emotions to consider.

Debt Snowball

This brings me to the Debt Snowball method. This debt payoff strategy was popularized by American money expert Dave Ramsey, author of The Total Money Makeover, and it seems to be a prominent choice amongst real people paying off real debt.

This method isn’t about paying off your most expensive debt first but instead paying off your smallest debt first. As you may have guessed, this strategy won’t save you the most money in interest as the Debt Avalanche method. But, from talking to a number of people who have become debt-free on my podcast, and reading a ton of debt blogs and testimonials in debt forums and Facebook groups, it seems to be the most effective.

I think why so many people choose the Debt Snowball method over the Debt Avalanche method is because you get an easy win right at the start.

Sequence Debt Type Balance Owing Interest Rate Minimum Monthly Payment
#2 Credit Card $3,000 20% $80
#4 Student Loan $10,000 5% $200
#1 Line of Credit $1,000 9% $18
#3 Personal Loan $5,000 10% $230

As shown in the example above, you’d be able to crush 1 out of 4 debts pretty quickly, considering it has such a low balance owing. With the success of paying off your first debt, you’d get an extra boost of confidence and motivation to keep paying off the rest of your debt.

Debt Snowflake

Last but not least, there’s the Debt Snowflake method, which actually should be used in conjunction with either the Debt Avalanche or Debt Snowball methods.

With both the Debt Avalanche and Debt Snowflake methods, you need to make sure your debt payments fit within your budget. I’d personally list your debt payments under the fixed expenses category of your budget. With this in mind, the Debt Snowflake method instead focuses on adding in extra amounts of “found money” onto your #1 debt.

For instance, if you get a bonus at work you weren’t expecting, you’d put that new money straight onto your debt. Or, if you get a tax refund after filing your taxes, get money for your birthday, receive an inheritance, or do a side gig to make some extra cash, that money would go directly towards your debt.

The logic behind this is that every little bit added up together can have a big impact. A snowflake in itself is tiny and insignificant, but a bunch of snowflakes can create snow storms, and blizzards and cover huge landscapes! Every little bit counts.

Debt Pay-Off Resources You Should Check Out

If you want to put one of these methods into practice, I’ve got a few suggestions for free resources you should check out.

Debt Repayment Spreadsheets

First off, my friend Jordann Brown from My Alternate Life has an awesome Debt Repayment Spreadsheet. It’s the exact spreadsheet she used to pay off $38,000 in debt in only two years!

Another spreadsheet worth downloading is the one created by Vertex42. It’s not super nice to look at, but it’s well organized and highly functional.

Debt Repayment Calculators

If you’re looking for something that looks more like an app, and if you’re not a fan of Excel, I suggest you play around with It’s a free online tool where you can plug in your debts and it will give you a timeline and graph for how long it will take you to become debt-free.

Credit Karma also has a very simple debt repayment calculator, and so does the Ontario Securities Commission’s blog Get Smarter About Money, Bank Rate, and

Need Some One-on-One Debt Help?

As much as this information is aimed to help you if you’re struggling with debt when working with my financial counseling clients, it’s rarely the lack of information that has them struggling. It’s not having someone to look over their entire financial picture, help them craft and plan, and most importantly, keep them accountable.

And that’s exactly what I provide in my financial counseling program. To learn more and to book a free 30-minute discovery call with me, click here.

Do you have debt you’re trying to pay off right now? Or have you successfully paid off your debt? Share your thoughts or story in the comments!

Disclosure: Nothing on my website or affiliated channels should be considered advice or an endorsement, and some content may include affiliate links in which I may earn a commission at no extra cost to you. Please read my disclaimer to learn more.

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