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Savings & Spending

Getting Ahead of Debt

Man waterfall

Making a plan to pay down debt can be empowering when you use a strategy that you can stick with. Two of the most popular tactics are known as the waterfall method and the snowball method. Here’s what to know about both.

The waterfall method (interest first)

Itemize all your debts from highest interest rate to lowest. Make the minimum required payment on every debt, then use any extra money to pay down the debt with the highest interest rate. Once that's paid off, move to the debt with the next highest rate.

Pros:

  • Prioritizes saving money on interest payments
  • Pays down the “most expensive” debt first
  • Efficient and numbers-driven

Cons:

  • Progress can seem slow at the beginning
  • Feels like fewer wins early on

This could be a good choice for those who are motivated to save more up front, prefer a logical, efficient approach, and are prepared to “play the long game” to reach goals. 

The snowball method (momentum first)

Itemize all your debts from smallest balance to largest, ignoring interest rates. Make the minimum required payment on every debt, then allocate any extra money to the smallest debt first. Once that’s paid off, roll the extra money into the next smallest debt—like a snowball picking up speed.

Pros: 

  • Quick progress early on (you may see debts paid off faster)
  • Gain confidence seeing smaller debts paid off faster
  • Simple to track

Cons:

  • You may pay more interest over time

This could be a good option for those who appreciate small victories and thrive on motivation to remain consistent.

Which is best for you?

On paper, the waterfall method can help you save more on interest payments. On the other hand, the snowball method often feels easier. So which is best for you? The answer is to pick the one that keeps you motivated to keep going. It’s also possible to mix the two—start with snowball for motivation, then switch to waterfall to save money.

Keep in mind: Paying down debt isn’t about being perfect, it’s about being persistent. Progress might feel slow at times, but every payment moves you forward. Whether you choose snowball or waterfall, you’re making a strong decision for your financial future.

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