Guide, 2026-11-04

Debt snowball vs avalanche: how to compare them in a spreadsheet

If you have more than one debt and some money left over after the minimum payments, you have to decide where the extra goes. The two best-known answers are the debt snowball and the debt avalanche. Both work. They differ in how much interest you pay and how soon you see a debt disappear, and a simple spreadsheet will show you the difference for your own numbers.

The two methods in one paragraph each

Avalanche: pay the minimum on every debt, then put all extra money on the debt with the highest interest rate. When it is paid off, move to the next highest rate. Mathematically this costs the least interest.

Snowball: pay the minimum on every debt, then put all extra money on the debt with the smallest balance. When it is gone, move to the next smallest. You usually pay more interest, but you clear a whole debt sooner, which many people find keeps them going.

In both methods the key move is the rollover: when a debt is paid off, its minimum payment does not go back into your spending. It joins the extra payment on the next debt, so the amount attacking your debts stays the same every month.

What you need before you start

• Every debt's current balance, annual interest rate (APR) and minimum monthly payment, from your latest statements.
• One fixed monthly amount you can put towards all debts combined. This must be at least the sum of the minimums.

How to simulate it by hand

1. Make one row per month and, for each debt, columns for opening balance, interest, payment and closing balance.
2. Interest: opening balance × APR ÷ 12. This is a simplification; card issuers usually calculate daily, so your statements will differ slightly.
3. Minimums: pay each debt its minimum, or the whole balance if that is smaller.
4. Extra: budget minus all the payments in step 3. Put it on the first debt in your chosen order that still has a balance. If that debt is cleared with money left over, the remainder goes to the next one.
5. Closing balance: opening + interest − payments. It becomes next month's opening balance.
6. Copy the row down until every balance is zero. The last month is your debt-free date; the sum of the interest column is your total cost.
7. Duplicate the sheet, change only the order, and compare.

A worked example

Fictional numbers, with a budget of $500 a month and fixed minimums:

The minimums add up to $265, so $235 is extra. In month 1 the interest is $9.00 on the store card, $100.00 on the credit card and $26.25 on the loan.

• Avalanche sends the $235 to the credit card (24%): $5,000 + $100 − $125 − $235 leaves $4,740.
• Snowball sends it to the store card (smallest balance): $900 + $9 − $30 − $235 leaves $644.

Carried through to the end, with interest rounded to the cent each month:

Here the avalanche saves about $525 and one month. The snowball gives a first win in month 4 instead of month 17. Either plan beats paying only the minimums by roughly five years and over $3,800 of interest, which is the bigger lesson: the order matters less than having a fixed budget and rolling payments over.

Which should you choose?

If the rates are close together, the difference is small and the snowball's early wins may be worth it. If one debt has a much higher rate than the rest, the avalanche usually saves a meaningful amount. You can also mix them: clear one tiny balance first, then switch to highest rate. Run both and decide with the numbers in front of you.

Common mistakes

• Letting a paid-off debt's minimum drift back into everyday spending instead of rolling it over.
• Setting a budget below the total of the minimums, or a minimum that never covers the monthly interest, so a balance grows.
• Forgetting that 0% promotional periods end, and that new borrowing on a card undoes the plan.
• Building the sheet once and not updating it with real balances every few months.

When a ready-made planner saves time

The by-hand version is a good exercise, but the formulas for rollover and for a debt cleared mid-month get fiddly, and every "what if" means another copy of the sheet. DebtBook does the month-by-month simulation for you, lets you switch between avalanche, snowball and your own order, and flags a budget below the minimums. Like the method above, it assumes fixed rates and minimums with monthly interest, does not model promotional 0% periods or fees, and is a planning tool rather than financial advice.