Debt Snowball vs Debt Avalanche

A gentle guide to choosing your way out of debt

When you’re in debt, it can feel like you’re trapped in a room with no doors.
Bills come in, money goes out, and you’re not even sure if you’re moving forward.

On TikTok and other social media, you’ll often hear about “debt snowball” and “debt avalanche”. They sound dramatic, but actually they’re just two simple ways to decide:

“Which debt should I pay off first?”

This article walks through both methods slowly, using simple examples in RM / IDR, so you can choose what feels kinder and more realistic for your life.

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Why choosing a method helps

Many people pay their debts like this:

• Pay the minimum on everything.

• Throw a bit of extra money at whatever feels urgent that month.

• Repeat… and feel like nothing changes.

Having a method doesn’t magically create more money.
But it does give you:

• A clear order for which debt to attack first.

• A way to track progress (even if it’s small).

• Less mental load: you’re not re-deciding every month.

Both snowball and avalanche are just rules for deciding this order.

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Quick definitions

Before we go deeper:

• Debt snowball
  You focus extra payments on the smallest balance first.
  When that debt is gone, you roll its payment into the next one.
  This method focuses on quick wins to keep you motivated.

• Debt avalanche
  You focus extra payments on the highest interest rate first.
  When that one is gone, you roll its payment into the next.
  This method focuses on paying less interest overall.

In both methods, you still:

• Pay at least the minimum on all debts.

• Choose one “target” debt for your extra money.

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The Debt Snowball Method (emotion-first)

How it works

1. List all your debts:

   • Name (e.g. “Card A”, “PTPTN”, “Personal Loan”)

   • Current balance

   • Minimum payment

2. Ignore interest rate for now.
   Yes, really. Just look at the balance.

3. Order your debts from smallest balance to largest balance.

4. Every month:

   • Pay the minimum on all debts.

   • Put all extra money towards the smallest balance debt.

5. When that smallest debt is fully paid:

   • Take the money you used to pay it (minimum + extra),

   • Add it to the next smallest debt.

It’s called “snowball” because your payment amount gets bigger and bigger as you go, like a snowball rolling downhill.

Why people like it

• You get a “win” faster (one full debt gone).

• Emotionally, this can feel very powerful:
  “At least one thing is finally finished.”

• It’s simple to follow, even when life is busy.

Trade-offs

• You might pay more interest overall compared to avalanche.

• From a pure math point of view, it’s not always the most efficient.

But for many people, emotions come first.
If motivation and shame and anxiety are the real battle, snowball can be kinder.

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The Debt Avalanche Method (math-first)

How it works

1. List all your debts:

   • Name

   • Current balance

   • Minimum payment

   • Interest rate (e.g. 18% per year, 24% per year)

2. Order your debts from highest interest rate to lowest interest rate.

3. Every month:

   • Pay the minimum on all debts.

   • Put all extra money towards the highest interest rate debt.

4. When that highest-interest debt is fully paid:

   • Take the money you used to pay it,

   • Add it to the next highest interest debt.

Why people like it

• You pay less interest in the long run.

• Mathematically, this is usually the fastest way to become completely debt-free (if you keep going).

Trade-offs

• Your “problem” debt might be large, so it can take a long time before you fully clear the first one.

• That means fewer early “wins”, and for some people, motivation drops.

Avalanche works best when you are:

• Already somewhat stable,

• Ready to focus on the numbers,

• Confident you can stick to the plan even if progress feels slow at first.

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A simple example (in RM)

Imagine you have three debts:

• Card A: RM1,000 at 24% interest, minimum RM50

• Card B: RM3,000 at 18% interest, minimum RM150

• Personal Loan: RM5,000 at 10% interest, minimum RM200

You can pay RM800 per month towards debt in total.

With Debt Snowball

Order by balance:

1. Card A – RM1,000

2. Card B – RM3,000

3. Personal Loan – RM5,000

Every month:

• Pay minimum on all:

  • Card A: RM50

  • Card B: RM150

  • Loan: RM200

  • Total minimum = RM400

• Extra money: RM800 – RM400 = RM400

Month 1 and onwards, you put that RM400 extra to Card A (the smallest balance).
So Card A gets RM450/month (50 + 400) and disappears quite fast.

Emotionally, you feel:

“Yes, one card is gone! I’m not juggling so many things anymore.”

Then you roll that RM450 to Card B, and so on.

With Debt Avalanche

Order by interest rate:

1. Card A – 24%

2. Card B – 18%

3. Personal Loan – 10%

In this example, the order happens to be the same, so snowball and avalanche match.
But often in real life, your highest interest debt is not the smallest.

For example, if the RM5,000 loan had 24% interest and a smaller RM1,000 debt had only 10%, avalanche would make you attack the RM5,000 first.
You’d save more interest, but you’d wait much longer before fully clearing your first debt.

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Which one should you choose?

There is no perfect answer. But here are some gentle guidelines.

Snowball might suit you if…

• You often start money plans but struggle to continue.

• You feel very ashamed or anxious about debt.

• You need proof that “I can actually finish something”.

• You want a method that feels emotionally lighter and easy to follow.

Avalanche might suit you if…

• You like looking at numbers and comparing options.

• You’re stable enough to stay on track even if progress is slow at first.

• Your debts have big differences in interest rates, and you want to minimise interest.

• You feel more motivated by efficiency than by quick wins.

A quiet truth

Both methods:

• Require you to know your debts,

• Ask you to stick with a plan, and

• Will usually beat the “pay whatever, whenever” approach.

Choosing one is less about “what’s best in theory” and more about:

“What will I still be willing to do three months from now?”

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How to start in one evening

You don’t need a perfect spreadsheet to begin. A simple notebook is enough.

1. Write down all your debts.
   Include: name, balance, interest rate (if you know it), and minimum payment.

2. Choose your method.
   Snowball → sort by smallest balance.
   Avalanche → sort by highest interest.

3. Decide your extra amount.
   Look at your budget. Maybe it’s RM50, maybe RM500.
   It’s okay if it’s small. Small is still real.

4. Pick one “target” debt.
   That’s where all extra money goes.

5. Set a tiny review ritual.
   Once a month:

   • Update balances.

   • Notice what changed.

   • Celebrate any progress, even RM10 less.

If you like, you can later move this into a Google Sheet or simple tracker on your phone. But the important part is to get clear and start.

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Final reflection: kinder, not harsher

Debt already carries a lot of shame in Indonesia and Malaysia. We hide credit card balances from partners, feel guilty for eating out, and compare ourselves to “success” stories online.

Snowball and avalanche are not about punishing yourself.
They are about giving your money a direction.

It can help to remember:

• Your worth is not your net worth.

• Slow progress is still progress.

• Clearing one small debt is a real win, even if TikTok never sees it.

You’re allowed to choose the method that feels kinder to your mind, not just better on paper.