Snowball vs avalanche, honestly
The avalanche always wins on paper — paying the highest rate first minimises interest by definition. The snowball wins on completion rates, because an early, visible win keeps people in the plan. If your smallest debt also carries the highest rate, the two orders are identical and the argument disappears.
What counts as debt here
Baby Step 2 covers everything except the mortgage: credit cards, car loans, student loans, medical bills, personal loans, money owed to family, and buy-now-pay-later balances. The mortgage is dealt with in Baby Step 6.
Where the plan usually stalls
Two places. First, there is no $1,000 buffer, so the first flat tyre goes back on a credit card and the balance never falls. Second, the monthly payment number is aspirational — built from a budget nobody actually follows. Use a payment figure you have already hit for two consecutive months, not the one you hope for.
Accelerating without a raise
Sell one thing worth more than your smallest debt and the first win happens this month. Call each card issuer and ask for a rate reduction — a surprising share say yes to a customer in good standing. Redirect any tax refund straight into the current target rather than spreading it.
FAQ
How does the debt snowball work?
List every non-mortgage debt smallest balance to largest. Pay minimums on all of them, throw every spare dollar at the smallest. When it clears, add its entire payment to the next one. The payment applied to each successive debt grows, so the last debts fall fastest.
Is the snowball or the avalanche better?
The avalanche costs less interest; the snowball is completed more often. The calculator above shows the exact dollar difference for your debts — if it is small, take the motivation.
Should I stop investing during Baby Step 2?
Ramsey says yes, temporarily — except he advises keeping any employer 401(k) match in some framings and pausing entirely in others. Pausing a match is mathematically expensive: a 50% match is an instant 50% return no debt rate matches. Decide that one with your own numbers.
How long does the snowball take?
Most households with a real payment budget clear non-mortgage debt in 18–36 months. The calculator gives your specific date based on the balances and the payment you can genuinely sustain.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
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