Tackling Debt Strategically: Snowball or Avalanche?

Tackling Debt Strategically: Which method is better? Snowball or Avalanche?

Struggling with debt? You’re not alone, you may have heard of the Snowball Method and the Avalanche Method and dont know which one to choose.

In this article, we will be looking at the pros and cons of both to help you make the right decision.

The Snowball Method: Start Small, Win Big

The Snowball Method focuses on paying off the smallest debts first while making minimum payments on others. These early wins give you the confidence to keep going.

For example:

• £200 on a store card
• £1,000 on a credit card
• £3,000 on a personal loan

Pay off the £200 first, then tackle the £1,000, and so on.

Pro Tip: You can keep a close eye on your spending and free up extra cash using Emma or N26. These apps connect to your bank accounts, track expenses, help identify unnecessary subscriptions and even offer cash back on purchases on some of the accounts.

The Avalanche Method: Save on Interest

The Avalanche Method prioritises paying off debts with the highest interest rates first, saving you money in the long run.

For example:

• £2,500 at 20% APR
• £5,000 at 10% APR
• £1,500 at 0% (introductory rate)

Focus on the £2,500 debt first to minimise interest costs.

Pro Tip: You can use financial planning tools like Emma or N26 to track debt repayment progress and uncover insights that can help you save on interest.

So there you have it, the difference between the two methods, Whether you prefer the quick wins of the Snowball Method or the cost-saving focus of the Avalanche Method, combining your approach with smart tools like Emma and N26 can make all the difference.

If you're looking to build a sustainable budgeting practice, check out my Financial Sense Course. This course guides you through mindful budgeting, helping you manage your money while reducing financial stress.

Learn more and sign up today: Financial Sense Course.

If you are looking to roll all your debts into one loan for easier management, or need a quick loan to avoid higher credit card interest look at credy.es or masterloan.co.uk