Snowball vs. Interest vs. Emotional Debt Reduction

As I’ve been reading over the last few weeks about debt reduction, I’ve come across three main theories of how to reduce your debt.

  1. Snowball
  2. Interest
  3. Emotional

I thought I would talk about these fairly quickly today and see if anybody is actually reading and willing to post what they like about one over another.  Then in a later post I’ll talk about what I am planning on doing.


The snowball plan is fairly simple and straight forward.  I’ve heard about this for years, we just have never put it in to play (our bad!).  What the idea is, is you list out all your debts.  You then order them from lowest amount owed to most amount owed.  You pay the minimum on each debt, and put any extra money you have each month to the debt that has the lowest amount owed.  That will help pay off the lowest debt first and quickest.  This is to help give you confidence that you can pay off debt.  Once that first debt is paid off, you will have extra money the next month (money that you had been using to pay off the lowest debt).  You take 100% of that money and put it towards paying off the next debt.  Once you pay off that debt, you move all the money to the next one and so on until all of your debts are paid off.  Like a snowball rolling down a hill, your payments grow in size as it keeps rolling.


The interest plan is exactly like the snowball (and in reality, the Emotional is as well).  The difference here is you don’t list your debts by lowest owed to highest owed, you list them by HIGHEST Interest rate to LOWEST interest rate.  That way you pay off your highest interest rate first and then slowly pay down your lower cards.


This final plan I call Emotional.  I first read about it over on Baker’s Man vs. Debt and he calls it a Debt Tsunami.  You still list out all your debts in order, and then you look at each individual debt and see which ones would really, EMOTIONALLY feel the best to get out of the way first!  Go over and read a much better post about the Debt Tsunami.  This is a great way to get rid of debts you may feel really bad about or a company that just doesn’t give you the customer service you need.  Sometimes it might be linked to Interest rate, sometimes it won’t.  You may want to get a school loan out of the way ASAP!  You have to decide what is the best way for your debts to go away.

There is a site that lets you put in your debts, your payments and the interest rate, and it will let you look at how your debts will disappear with the Snowball vs. the Interest plan.  It doesn’t have the ability to do an Emotional plan, but someday maybe it will.  🙂

I took our personal debts* (not counting mortgages) and entered them in to the calculator and I thought I would share the differences.

Personal Snowball

It will take you 40 months to pay off these debts if you snowball correctly. During that time, you’ll pay $3,569.00 in interest.

Personal Interest

It will take you 40 months to pay off these debts if you snowball correctly. During that time, you’ll pay $3,475.00 in interest.

Now as you can see, it will take us EXACTLY the same amount of time for the snowball and the interest plan.  With the interest plan, we would pay about $94 less in interest.  I haven’t decided which of the three plans will work the best for us, I’m still trying to look at the Emotional plan and see if any of the debts are most emotional for us.

Do you follow any certain plans?  Do you look at your debts a certain way.  Let me know!

*Unlike other sites, I won’t be sharing our personal debt here on the blog.  I’ll share percentages, and other non-specific numbers, but not the total numbers.  I just don’t think that helps anyone. 


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