The Debt Avalanche Method - How To Pay Off Debt Fast!

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Theoretically, like an avalanche, it may take some time for things to start moving. But, once they start moving, they move fast!

A Word On Debt

If you’ve found this page, then you’ve probably already made the decision to pay off debt to some degree. But, just in case you are still on the fence, be sure to check out my post on why ALL debt stinks for further convincing.

Now, if you’re ready to hit the ground running, let’s talk methodology. You’re probably familiar with a few debt pay off ideologies at least by name. My goal here is to help unpack one in particular.

That method? – The Debt Avalanche

How The Debt Avalanche Works

Sometimes the only way to explain what something is, is to explain how it works. So, let’s dive in.

The idea behind the debt avalanche is simple.

Make a list of all your debts
Reorder those debts with the largest interest rate debt on top down to the lowest interest rate debt at the bottom.
Make minimum payments on everything except for the largest interest rate debt. Pay all you can on that debt until it’s gone.
Work your way down the list until all your debts are paid in full.
The end.

See? Like an avalanche, it may take some time for things to start moving. But, once they start moving, they move fast!

Why The Debt Avalanche “Works”

The idea behind the debt avalanche is to save you the most money possible as you work your way through debt. By eliminating the highest interest rate debts first, you are ensuring the shortest path (mathematically at least) to victory.

My Arguments Against The Debt Avalanche

However, as with all things, there’s a downside.

It’s possible that your highest interest rate debt is also your largest. If so, you might go a very long time before your avalanche breaks free. In other words, it could be a while before you get your first taste of victory.

For most people, it’s hard to stick with something for the amount of time we’re talking about here without some small victories along the way. If, like most people, you need that extra motivation to stay in the game, check out the debt snowball method. This is the method my wife and I used with no regrets, and the only method I recommend.

Closing Thoughts

While I did not use the debt avalanche method personally to pay off debt and do not recommend it, it’s still worth understanding what it means so you can sift through the information that is out there. If you have an analytical mindset, it may sound appealing, but I can promise you that nothing beats those small victories afforded to you by the debt snowball method!

The most important thing to do in regards to paying off debt is to do it. Use this method. Use another method. Make up your own method. But get rid of debt!

And as always, regardless of your money goals, you can “Bank on a Budget” to get you from where you are to where you want to be!

The most important thing to do in regards to paying off debt is to do it. Use this method. Use another method. Make up your own method. But get rid of debt!

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Alex

Hello, my name is Alex! I'm a public school teacher who has achieved some big financial goals just by getting control of my money using some simple strategies like using a monthly budget. Now I'd like to share what I've learned with you. Welcome to "Bank on a Budget!"