Debt Snowball Vs. Avalanche

First off, what is a debt snowball and why the hell would I want one?

The debt snowball method is simply a metaphor for paying off debt.

If you have any kind of debt, then this applies to you. Mortgage debt is something entirely different which we can discuss in another section, but if you have credit card debt, personal loans, student loan debt, charge card debt, auto debt then this is all applicable.

The Debt Snowball Method:

Snowball Giff.gif

Ok, so what is the debt snowball method for paying off debt?

This is simply put paying off your smallest balance loan first, while maintaining your minimum monthly payments on all your other debts thus avoiding accruing interest (keeping those other debts at bay), and then rolling the first payment into the second payment when the first payment has been paid off.

In effect your total paid towards debt is constant each month but it is a means of paying down your debts and principles faster than if you were to continue making the minimum payment each month on your monthly debts.

The Debt Avalanche Method:

Avalanche Method.gif

The debt avalanche method is paying off your highest interest rate loan first, while maintaining your minimum payments, then rolling the first payment into the next highest interest rate loan.

Just like with the debt snowball method you are paying the same minimum payments towards each of your loans, only you are paying off the highest interest rate loan first thus saving you money in the long run. I will show you how in just a moment.

One Thing To Focus On

Of the two loan repayment methods there isn’t a “better” one, rather, both methods work but which would you rather see? Quicker results or knowing that you will hit your overall goal faster? I will illustrate what I mean below.

Now we are also going to assume, for this example, you can find a way to earn an extra $500 a month, maybe as an uber driver or walking dogs, starting your own side business or working some place else.

If you can generate that extra $500 you will be able to apply that directly towards your loan and thus repay your loans back much much faster.

Here’s an example of the Debt Avalanche in effect with the same numbers:

You would take the highest interest loan and pay that first. In this case it would be your  payment and continue paying your other minimum payments:

Credit card – $189 – %19.99 Loan

Auto – $350 – %5 Loan

Student Loan – $250 – %3.6 Loan

Total Payments each month = $789

Here’s what you would see:

The Debt Avalanche Payoff Method

So paying off with the Avalanch method, and applying as little as $500 extra a month towards your payment, can result in you paying your loans off 5 years and 5 months faster than not paying the extra $500 and this will result in a savings of $5,756 in interest.


Now lets compare that to the Debt Snowball Method:

The snowball method you would take the lowest balance remaining loan and pay that first. In this case it would be your auto payment, apply $500 extra payment:

Auto – $350 – %5 Loan

Credit card – $189 – %19.99 Loan

Student Loan – $250 – %3.61 Loan

Total Payments each month = $789

Here’s what you would see:

The Debt Snowball Payoff Method

Paying off the Snowball method and applying as little as $500 extra a month towards your payment can result in you paying your loans off 5 years and 5 months faster, saving $5,451 in interest.

So Which is Better, Debt Snowball or Debt Avalanche?

Well if we look at the two repayment periods, keeping all else constant, we can see that both methods show the repayment being 5 years and 5 months faster. Thus saving us the same amount of time.

The Key difference is the interest saved. By simply paying off the highest interest rate loan first and then rolling the excess savings from the previous loan into the next loan repayment we find that we can save $5756 – $5451 = $305.

It may not seem like much, but that’s extra money that you put back in your pocket just by changing the order you repay your loans.

So is it worth it to use the Avalanche method instead of the snow ball method? You decide. One gets your better results in the long run (the avalanche), where as the other gets you instant relief sooner (the snowball).  And we all know that the sooner we can get out from underneath the crushing weight of debt the better.

To get your repayment time frame head over to Nerdwallet and plug in your loans into their repayment calculator and find out which method is best for you. Check out the repayment calculator here.

Learn to Replace Any Habit in 7 Simple Steps

We all have a habit that we wish we didn’t, maybe it was biting your nails, eating junk food when we are stressed, or shopping when we feel lonely.

Since habits are so simple and easy to form, is it any wonder that we have problems in life?

So what is a habit and how does one go about forming new ones?

According to, habits are “an acquired behavior pattern regularly followed until it has become almost involuntary”.

So now the question becomes… How does one change a habit. The simple answer is, merely create a conflicting habit which takes over.

Want to stop stress eating? Practice deep breathing.

Want to stop caffine? Try drinking tea or decafe instead. Change your diet to a more health and energy promoting one, and go to bed earlier.

Want to stop biting your nails? Wear gloves.

Every “bad” habit as a remedy and the solution comes in the form of continuous reinforcement.

But Where to Start?

Once we recognize bad behaviors or behaviors which are less favorable, we can begin to change them by putting into practice systems that allow the good behaviors to flourish and the bad ones to die off slowly.

The first part of habit creation is noticing a behavior you wish to change.

The second part, and often the hardest part, is implementing system to support such change.

The third, and final stage of habit restructuring, is revisiting the system, evaluating the outcome (does it work?), and modifying the system for further support of the new habit creation.

An Example of A Behavioral Change Project:

Lets say you want to lose 20 pounds in the next 3 weeks.

Rather than go on a crash diet and then give up after 10 days of doing it, why not make an activity become your behavior change.

Your results won’t be instant, but you will be focusing on the behavioral change rather just the results, weight loss, that you desire.

Lets make a plan to drop some weight and do it through adoption of a healthier diet.

We will break things down into a series of steps which you can follow for any habit which you wish to replace.

Step 1: Recognize bad, or unhealthy behaviors, and document them.

At this stage we don’t need to try and change ourselves, at least not yet, our sole focus is to document what we are doing wrong and try to capture all of it on pen and paper or on a notepad on your phone or computer.

An example of a bad behavior could be eating junk food and fast food during the week or during times of stress. Don’t judge yourself, just write it down.

This could be due to not cooking at home, not being prepared with healthy food options at home, running out of time due to lack of preparation, or simply laziness, but again we aren’t judging or trying to change our behaviors in this stage, we are merely documenting them.

Step 2: Research a solution

Look at blogs, websites, ask friends, find an expert or a perceived expert who can help you.

Start by gathering 2-3 recipes which you wish to make that week from sources online like pinterest,, or another health food blog which you follow.

I found one on Pinterest i’d like to make (and in fact I’ve made this the last 3 years of my lifestyle change).

Next step is to print off the recipes and make a meal shop list for the ingredients.

Step 3: Map Out A Plan

I like to call this the “initial roadmap” for success.

In our initial weight loss example, changing that behavior, we could try cooking for ourself for a week and make all of our meals in advanced thus saving both time and money in the process and teaching us a valuable skill.

This is how you will replace the unhealthy bad behavior with healthy good behavior.

The best way to save time at the grocery store is to make a list before you go shop. You can literally save yourself hours at the store and walk away with more money in your pocket too. For more on why list shopping is superior to “free-balling it” check out: How to cut your grocery shopping time in half.

So make a list of all the ingredients you will need for the recipe to make 6 days of meals, give yourself a cheat day, they are good for you.

Cross anything off the list that you already have in the kitchen (spices, cream, almond milk, etc).

Take your refined list and save it to your iPhone.

Step 4: Take the first step, it’s always the hardest.

In our example it’s shopping for the groceries. The first trip to the store you might feel like it’s a major waste of time, you can’t do it, you spend too much time reading labels, or a number of other excuses that come to mind. That’s ok. You are learning.The first time I went to the store I sure as hell wasnt as efficient as I am today. I was reading labels for what felt like hours. Seemingly making little to no progress… but what I didn’t realize was that I was building up a mental library of every food that I bought, in addition to a mind map of the store. If you shop at the same store weekly you will begin to realize that you know where your staples are located. So the trick is to just go when there are no crowds, learn what you need, make a list before you go and eat something, then make the shop. You will save time, money and sanity if you do it like I’ve outlined in How to cut your grocery shop time in half.

Step 5: Batching your work for better, faster results.

Follow the recipes and make large enough batches to prep food for the whole week, portioning them out and labeling with datesIf you are making food for one meal it takes a whole lot less effort to make an additional 5 meals all at once rather than 6 individual meals separatly. So save time, and energy, and make bigger batches of your meals and you will find weight loss will happen naturally as well. Which leads me to my next point…

Step 6: When your result is completed ahead of time you can focus the energy on other things.

Just open up the container and eat the meal when you need it, it’s ready and delicious, and the best part Is that you know exactly what’s in it. When you have a result delivered directly to you and you pay a smaller amount, whether it’s in time, money, or energy, you gain back additional energy you can use on other more important projects.

Step 7: Incorporate one new habit a month until you have 12 new habits a year.

With our meal example, you can simply add one new recipe to the rotation each week and by the end of the month you will know 12 new recipes, one for each meal of the day. You will know exactly what goes into the meals and you will have full control over your budget for your meals too, spending less money on what doesn’t matter and reinvesting the difference in the betterment of your life.

Also, one last thing…

Don’t forget to track everything. Measuring your results, be it weight loss, money saved, time saved or happiness gained, it’s important that you benchmark where you are and where you were.This system will help facilitate a healthy habit and end with the results of losing weight and feeling better. If you take this approach to everything you do, this approach of systematizing everything, you may actually find that you become more creative in the process.

How to Change Any Habit