Financial Strategy Versus Battle
Fig 7.0: The Strategy Conflict

Snowball VS Avalanche

Strategy A: Snowball
Pay smallest balance first. Ignores interest rates. Builds psychological momentum.
Strategy B: Avalanche
Pay highest interest rate first. Mathematically optimal. Saves the most money.

There is a war in personal finance. The Mathematicians say "Pay the high interest rate first." The Psychologists say "Pay the small debt first to get a quick win."

Which is better for you? Input your debts below to see the math.

// DEBT MATRIX INPUT
DEBT 1 (Small Balance)
DEBT 2 (High Interest)
EXTRA CASH AVAILABLE MONTHLY ($)
SNOWBALL
Smallest Debt First
...
Interest Paid: $0
AVALANCHE
Highest Rate First
...
Interest Paid: $0

The Verdict: Math vs. Human Nature

The Avalanche Method (Red) will always be mathematically cheaper. It attacks the interest rate directly. If you are a robot, choose Avalanche.

The Snowball Method (Blue) is for humans. If you have 5 debts and you pay off the small one in month 1, you get a dopamine hit. That motivation might keep you going.

Axiomindzz Rule: If the interest difference is small (< $500), choose Snowball. If the difference is huge, choose Avalanche.

Strategy FAQ

What is a Debt Consolidation?

Combining all debts into one single loan with a lower interest rate. It simplifies life but doesn't solve the spending habit.

Should I invest while in debt?

If your debt interest is > 7%, pay the debt. If it is < 4% (Mortgage), you can invest. Check the Dividend Calculator to compare returns.

Once you are debt free, build your F-You Money.

>> CALCULATE YOUR RUNWAY