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Decision framework · Debt
Debt Payoff Strategy Selector
Choose between avalanche, snowball, or hybrid approaches based on your psychological and financial profile
01
Create Your Debt Inventory
Key questions
- What debts do you have (list all with balances)?
- What is the interest rate on each debt?
- What is the minimum payment on each?
- What is the total debt amount?
ConsiderationsInclude all debts: credit cards, student loans, auto loans, personal loans, medical debt. Don't include mortgage unless you're specifically targeting it.
02
Determine Available Extra Payment
Key questions
- What is your monthly budget surplus?
- Can you reduce expenses to increase debt payments?
- Are there income opportunities to accelerate payoff?
- What windfalls might you receive (tax refunds, bonuses)?
ConsiderationsEven small extra payments make a big difference. $100/month extra toward a $10,000 debt at 20% saves years and thousands in interest.
03
Understand Your Options
Key questions
- AVALANCHE: Pay highest interest first—are you motivated by math?
- SNOWBALL: Pay smallest balance first—do you need quick wins?
- HYBRID: Start snowball, switch to avalanche—want both?
- What has worked for you in the past?
ConsiderationsAvalanche saves the most money. Snowball has higher success rates because of psychological wins. Choose based on self-knowledge, not theory.
04
Select and Commit to Your Strategy
Key questions
- Which method matches your personality?
- Have you created a payoff timeline?
- What milestones will you celebrate?
- Who will hold you accountable?
ConsiderationsThe best strategy is the one you'll actually follow. Consistency beats optimization. Choose, commit, and don't second-guess.
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