Proven strategies to eliminate debt and achieve financial freedom
Two Main Debt Payoff Strategies
There are two proven methods for paying off multiple debts: the Avalanche Method and the Snowball Method. Both work, but they take different approaches based on different priorities.
Debt Avalanche Method (Mathematically Optimal)
The avalanche method focuses on paying off debts in order of highest to lowest interest rate. This approach saves you the most money in interest over time.
Debt Snowball Method (Psychologically Powerful)
The snowball method focuses on paying off debts in order of smallest to largest balance, regardless of interest rate. This approach provides quick wins that build momentum and motivation.
Step-by-Step Debt Payoff Plan
- List all your debts with balances, interest rates, and minimum payments
- Build a $1,000 emergency fund first
- Stop creating new debt
- Find extra money through budgeting and income increases
- Execute your chosen strategy (avalanche or snowball)
- Build full emergency fund once debt-free