Money Mechanics Blog

Overcoming debt is often the first step on the journey to financial freedom. Two popular strategies for debt repayment are Debt Snowball and Debt Avalanche. Both methods offer distinct approaches to paying back your debt.

Debt Snowball Method

The Snowball method focuses on tackling debts from smallest to largest regardless of interest rates. You start by paying off the smallest debt while making minimum payments on others. Once a debt is cleared, you roll over into the next smallest debt, gaining motivation with each success and pay off.

Debt Avalanche Method

On the other hand, the Avalanche method prioritizes debt based on their interest rates. Targeting the debt with the highest interest rate first, allocating extra funds towards while making minimum payments on other debts. This method saves money on interest rate payments in the long run.

Deciding which method would work best for you depends on your financial situation and future goals. The Snowball method provides quick wins and motivation, while the Avalanche method saves money on interest payments. Whichever method you choose, taking proactive steps to manage debt is key to financial wellness.

By staying committed to your plan, you can pave the way for a debt-free future. Remember, every step towards debt repayment, no matter how small, brings you closer to financial freedom.