How to Get Out of Debt Fast — The Avalanche and Snowball Methods

Carrying high-interest debt is the single biggest obstacle to building wealth. A $10,000 credit card balance at 20% costs $2,000 per year in interest — money that could be invested. Here’s how to eliminate it systematically.

Method 1: Debt Avalanche (Mathematically Optimal)

Pay minimum payments on all debts, then throw every extra dollar at the highest-interest debt first. Once paid off, roll that payment to the next highest rate. Repeat.

• Best for: People motivated by saving the most money
• Result: Pays the least total interest of any strategy
• Challenge: Highest-rate debt is often the largest — can feel slow at first

Method 2: Debt Snowball (Psychologically Powerful)

Pay minimum payments on all debts, then attack the smallest BALANCE first — regardless of interest rate. Build momentum from quick wins.

• Best for: People who need motivational wins to stay on track
• Result: Pays slightly more in total interest than avalanche
• Advantage: More people actually complete it — consistency beats optimization

Example Comparison

The Hybrid Approach

For many people, the best strategy is a hybrid: use snowball for the first 1–2 debts (to build momentum and cash flow), then switch to avalanche for the remaining high-interest debts.

How to Find Extra Money for Debt Payments

• Sell unused items: Most people have $200–2,000 in unused stuff
• Reduce subscriptions: Audit every monthly charge — average Canadian has $200+/mo in unused subscriptions
• Increase income: Even $300–500/month in side income dramatically accelerates payoff
• Balance transfer: Move high-rate debt to a 0% promotional card (watch the transfer fee)