Debate: Should you pay off the smallest debt first or the one with the highest interest?

I was $12,000 in debt from credit cards and a car loan in Nashville. I tried the snowball method paying off a $500 store card first because it felt good. But then I ran the numbers and the avalanche method on my 22% APR card would have saved me $800 in interest. Which one actually works better for you guys long term?

2 comments

2 Comments

the_joseph3d ago

Snowball worked for me because the small wins kept me from giving up, but avalanche is better if you can stick with a spreadsheet for two years. Running the math is good, but knowing yourself matters more.

lily_stone762d ago

Wait, is it bad that I'd probably pick snowball just because I like the dopamine hit of crossing things off a list (even if the math says I'm losing money in the long run)? Yeah, I totally get that sticking with a spreadsheet for two years sounds like a punishment, not a plan. My budget spreadsheet usually lasts about three weeks before I forget what column has the rent in it. Honestly, I think snowball works better for people like me who need a gold star every month or they'll just give up and buy a pizza.