The three strategies
Purpose Budget's Debt Payoff Tracker supports three strategies for ordering your debts. Each has trade-offs between math and motivation.
Snowball: Smallest balance first
The Snowball method orders debts from smallest to largest balance. You make minimum payments on everything except the smallest debt, which gets all your extra dollars.
- Pro: Quick wins build momentum and confidence
- Pro: Fewer accounts to track as you eliminate small debts fast
- Con: May pay more total interest than Avalanche
Best for: People who need motivational wins to stay on track, or those with several small debts they want to eliminate quickly.
Avalanche: Highest interest first
The Avalanche method orders debts from highest to lowest interest rate. By attacking high-rate debt first, you minimize total interest paid.
- Pro: Mathematically optimal — saves the most money
- Pro: Stops expensive debt from growing
- Con: First payoff may take longer if high-rate debt has a large balance
Best for: People who are motivated by saving money and can stay disciplined without quick wins.
Custom Order: You decide
Sometimes neither Snowball nor Avalanche fits your situation. Custom Order lets you drag and drop debts into any order you prefer.
Common reasons to use Custom Order:
- Pay off a family loan first for relationship reasons
- Eliminate a debt with an upcoming rate change
- Focus on a debt that causes you the most stress
- Prioritize a secured debt (car loan) to protect an asset
Best for: When you have specific priorities beyond balance or interest rate.
Which strategy saves more?
The Debt Payoff Tracker shows a Strategy Comparison that calculates:
- Total interest paid with each strategy
- Time to debt-free for each strategy
- How much you'd save by switching
Use this to make an informed decision. Sometimes the difference is small enough that motivation matters more than math.
What about extra payments?
The Extra Payment slider shows how additional monthly payments accelerate your payoff regardless of strategy. Even $50/month extra can save months or years.
Can I change strategies later?
Yes! You can switch strategies anytime. The tracker recalculates projections immediately. As you pay off debts, revisit your strategy — what made sense before may not be optimal now.
Want the full guide?
For a complete walkthrough with examples: Debt Payoff Tracker Guide.