Snowball: smallest balance first, and why I usually pick it
Okay. Last time we did the avalanche — highest interest rate first, the math-optimal answer. If you did the worksheet, you've got your debts sorted top to bottom by APR, and mathematically that's the right order to attack them in. I'm not taking that back.
But I want to show you the other way, because it's the one I actually use, and it's the one I recommend to most people who walk into this class.
The snowball, real quick
Same idea as the avalanche, flipped. Instead of ordering your debts by interest rate, you order them by balance. Smallest to largest. Doesn't matter what the rate is.
You pay minimums on everything except the smallest balance. That one gets every extra dollar you can throw at it. When it's gone, you take the whole payment — the minimum plus whatever you were adding — and roll it onto the next smallest. Then the next. It gets bigger as you go, like a snowball rolling downhill picking up more snow. That's the name, it's not clever, it's just accurate.
Why I don't do the "better" one
I tried the avalanche first. Highest rate card, put everything extra there, felt very responsible about it. Quit after about two months.
Here's the thing nobody tells you about the avalanche — sometimes your highest-rate card is also your biggest balance. So you're throwing extra money at it for months and the number barely moves. You open the app, balance is basically where it was, and some part of your brain goes "this isn't working" even though it is working, mathematically, it's working exactly as designed. It just doesn't feel like it's working, and feel is what keeps you going at 9pm on a Tuesday when you'd rather not think about any of this.
Switched to smallest balance first and had one paid off in like six weeks. That win, seeing a whole account hit zero, did something the spreadsheet couldn't do. I kept going after that. I don't think I would've kept going on the avalanche, honestly. I think I would've quit around month four and gone back to just paying minimums and pretending it was fine.
So — opinion, and I'll just say it plainly since I say this every time: I feel like momentum beats optimization when you're the one who actually has to keep doing this for two years. The avalanche saves you real money, some money, in interest. The snowball keeps you in the game. A method you stick with beats a better method you quit.
Show both, let people pick. That's genuinely how I feel about it.
How to actually do this at home
- List every debt with its balance. Not the rate this time — the balance, dollar amount.
- Sort smallest to largest.
- Keep paying minimums on all of them, always, no skipping — this part matters, a missed minimum can ding your payment history and that's one of the five factors we talked about a few lessons back.
- Whatever extra you can find each month — and I mean whatever, twenty bucks, forty bucks, doesn't have to be dramatic — goes on top of the minimum for whichever debt is smallest right now.
- When that one hits zero, close it out, and roll its whole payment onto the next smallest. Don't let that money quietly disappear back into your checking account. That's the step people skip.
The dad conversation
My dad, Stephen, paid cash for basically everything his whole life. Doesn't believe in credit cards, thinks the score is "made up." And look — I don't fully disagree with him, it kind of is made up, it's a number a private company calculated based on rules they mostly don't publish.
But I had to explain to him once that the made-up number still decides what interest rate you get offered on an actual loan for an actual car. Made-up or not, it's attached to real dollars. That conversation is basically why I always try to explain why something exists before I explain how to do it — with him it was the score, but it's the same with the snowball. The "why" here is: the math isn't the only thing that matters. Your ability to stick with a plan for eighteen months is also math, in a way. It's just math about a person instead of a number.
One honest caution
The snowball can tempt you to ignore a high-interest card sitting at the bottom of your list for a long time if it's also got a big balance. That's the real cost — you'll pay more in interest over the life of it than you would on the avalanche. I think that trade is worth it for most people. I don't think it's free. Go in knowing that.
Before next time
Take your list from the avalanche worksheet and just re-sort it by balance instead of rate — takes five minutes. Look at both orders side by side and notice which one you'd actually stick with, we'll talk about it.