Debt-Free Game Plan: Snowball vs. Avalanche Methods

Feeling overwhelmed by debt? You're not alone. Navigating your way to financial freedom may seem challenging, but the right strategy can make all the difference. Today, we’re breaking down two popular approaches: the Snowball and the Avalanche.

Snowball Method:
Start by paying off your smallest debt first while making minimum payments on the rest. Once the smallest is gone, move on to the next one. This approach builds momentum through quick wins, which can be incredibly motivating.

Avalanche Method:
Focus on tackling the debt with the highest interest rate first, regardless of the balance. This strategy saves money on interest over time, making it a more cost-effective option in the long run—if you can stay patient.

Key Steps to Manage Your Debt:

• List Your Debts: Organize them either by balance (for Snowball) or by interest rate (for Avalanche).

• Budget Wisely: Determine how much extra you can put towards your debt each month.

• Stay Consistent: Stick with your chosen method and avoid missing payments.

• Celebrate Milestones: Every debt cleared is a victory—acknowledge your progress.

A recent study from the Canadian Payroll Association shows that over 60% of Canadians report that managing multiple debts is their primary financial stressor. Whether you choose the snowball or avalanche method, consistency is key to moving closer to a debt-free life.

Ready to tackle your debt? Find the strategy that works for you, and take it one step at a time.