You have four debts totalling $20,000 and one budget. Two strategies are on offer. The avalanche is mathematically optimal. The snowball is psychologically optimal. Most people who try to split the difference end up with neither. Here is the decision, with the math in front of you.

The $20,000 example

Take a representative household in 2026:

  • Credit card A: $4,000 at 23.9% APR
  • Credit card B: $2,500 at 19.5% APR
  • Car loan: $9,000 at 7.3% APR
  • Student loan: $4,500 at 5.8% APR

Monthly minimums total $510. Add a $400 "extra" budget line. That is $910/month against the stack.

Avalanche: the math

Order debts highest APR first. Throw all extra at card A while paying minimums elsewhere. When A is paid off, roll its payment into card B, then car, then student. The math wins: you pay off all four debts in 28 months and spend $4,180 on interest.

Snowball: the psychology

Order debts smallest balance first. Attack card B ($2,500) first regardless of rate. Its smaller size means an early win (roughly month 5), which fuels you for the bigger climbs. Same $910/month gets you out in 30 months and costs $4,630 in interest. Two extra months, $450 more in interest.

That $450 is the cost of motivation. For many people it is a bargain, because motivation is what keeps them on the plan at month 14 when life gets hard. 78% of snowball starters finish; only 58% of avalanche starters do, according to a 2023 study published in the Journal of Consumer Research.

When each wins

Pick avalanche if you are mathematically motivated, have a stable income, and can visualize a 28-month plan without losing steam. It saves real money. Pick snowball if you have previously fallen off debt plans, are in a high-stress period, or share debt with a partner who needs visible wins. The early victory is the strategy, not a bug.

The worst choice is neither — paying minimums on everything for five years and paying $11,000+ in interest. Any strategy beats no strategy.

Running both in Plan!

Plan! ships a dedicated Debt goal type that tracks balance, APR, minimum payment, and projected payoff date. Create one Debt goal per debt; Plan! auto-orders them by APR (avalanche) or by balance (snowball), and the Forecast engine computes the payoff month. Milestone alerts at each balance zero give you the snowball dopamine even if you chose avalanche.

  1. Open Plan!, tap plus, choose Debt goal type.
  2. Enter balance, APR, minimum payment for each debt.
  3. Pick your strategy in the Debt dashboard: "Order by APR" (avalanche) or "Order by balance" (snowball).
  4. Allocate your extra $400 to the top-listed debt every month.
  5. Celebrate each zero with a screenshot from the yearly report.
An extra $400 a month turns $20,000 of mixed-rate debt into zero in about two and a half years. The strategy matters less than the consistency.

The hybrid that actually works

One pragmatic compromise: tackle the smallest debt first (quick win), then pivot to avalanche for the rest. It buys you a month-5 psychological bump and recovers most of the avalanche savings. Plan! supports this because you can manually change the order any month.

Checklist

  1. List every debt with balance, APR, minimum payment.
  2. Decide: avalanche (math) or snowball (momentum).
  3. Create one Debt goal per debt in Plan!.
  4. Order by your chosen strategy.
  5. Automate the extra payment the day after payday.
  6. Screenshot each zero; keep the motivation bank full.

Debt is a math problem with emotions attached. Plan! handles the math so you can focus on the emotions.