One budget, two orders

Published 2026-09-16 · Last reviewed 2026-09-22

Snowball and avalanche are not two budgets. Both pay every minimum, then throw the same extra money at one debt until it is gone, then move on. The only difference is which debt is chosen: the smallest balance (snowball) or the highest interest rate (avalanche). So the question this guide can answer with arithmetic is narrow, and worth asking anyway - what does that one decision cost?

Three debts, $300 a month of extra money

Picture $19,800 owed across three accounts: a store card at $1,900 and 9.99 percent, a credit card at $6,400 and 26.99 percent, and a car loan at $11,500 and 8.5 percent. Their minimum payments add up to $479, and the plan gives the focus debt $300 on top of that - so the first month costs $779 under either order. The snowball starts with the smallest balance and the avalanche with the highest rate, which is the point: the two strategies pick different targets from the first month.

What the order changes

The snowball clears the Store card first, in month 6, and finishes everything in 3 years 1 month for $3,906 of interest. The avalanche clears the Credit card first, in month 16, and finishes in 3 years for $3,388. Same debts, same budget, same first month: the avalanche pays $518 less and gets there 1 month sooner.

It is worth saying plainly how that gap was produced. The extra money lands on one balance instead of another, so it stops that balance accruing interest at its own rate. The gap is the rate difference on the balances both plans still carry, for as long as they both carry them - not a share of the debt, and not a fixed prize for choosing correctly.

The budget matters more than the order

Run the same three debts with no extra money at all - every account on its minimum - and the question stops being about order. That plan takes 5 years 3 months and costs $8,639 in interest, which is $5,251 more than the avalanche plan with $300 a month. The choice between snowball and avalanche is worth $518 on these numbers; the extra $300 a month is worth $5,251. If only one of those two decisions is available this month, it is not the ordering one.

Where these numbers come from

• A month-by-month calculation, not a lookup table. Every month it adds one twelfth of each balance's rate, pays every minimum, and sends whatever is left - plus the whole minimum of any debt already cleared - to the focus debt. That is the same set of steps the debt payoff calculator runs, so the figures above and the tool cannot drift apart.
• The three debts are illustrations. Balances, rates and minimums are chosen to make the two orders disagree; nothing here is presented as a typical rate for a store card, a credit card or a car loan, because there is no such number.
• Nothing else is included. No new borrowing, no late fees, no minimum payments that change with the balance, no promotional rate that expires. Those all move the answer and each has its own place on the site rather than a hidden assumption here.

What this guide does not cover

It does not tell you which order to use. The avalanche is cheaper in every run of this model, and the snowball clears a debt sooner - a difference that shows up in behavior rather than in arithmetic, and behavior is not something this page can measure. It also says nothing about credit scores (paying a card down is only one of several inputs, and closing an account is a different subject), nothing about consolidation loans, and nothing about what happens if the extra money disappears in month four. Those are real questions with answers elsewhere on this site; this guide is only the part that is arithmetic.

Test your own balances and your own rate in the Debt Payoff Calculator, compare a single card against a plan in the Credit Card Payoff Calculator, or price the alternative the lenders sell in the Debt Consolidation Calculator.

Estimates only - not financial, tax or legal advice. Read the full disclaimer.