What is the difference between the debt avalanche and debt snowball methods?

Both are systematic debt payoff strategies. In the Debt Avalanche, you make minimum payments on all debts but put every extra dollar toward the debt with the highest interest rate first. This minimizes the total interest you pay and is mathematically optimal. In the Debt Snowball, you attack the debt with the smallest balance first regardless of rate, gaining psychological momentum from eliminating debts quickly. Research shows the snowball method leads to higher completion rates for some people — because the psychological 'win' of eliminating a debt keeps motivation high. If you are disciplined, use the avalanche. If you need motivation to stay on track, the snowball may serve you better in practice. Run both scenarios at wealthserene.com/tools/debt-payoff.