By Brandon Koll | last updated 8/14/2025
Do you have any debt? For the sake of simplicity, we can narrow it down to any debt outside of a mortgage. Wouldn’t it be nice if you didn’t have to make monthly payments and you could instead use that money to do things that you love. I know this may sound too good to be true or you have debt because you already do too much of what you love. Let’s look at how we can change your mind about debt and hopefully make you debt free.
Make interest vs. pay
Assume that you had your A/C unit go out and you didn’t have any money. In that situation, you are likely to take out a loan to pay for the new A/C. We can pretend that the loan was at a 10% interest rate for $10,000. Now we can turn the tables and pretend you had slowly invested $6,000 over a year or two and now it has grown to $10,000. Instead of getting a loan, you pull out your $10,000 that you had saved and pay for the A/C. That $6,000 became $10,000 because of an annual 10% growth over several years. Now we can look at these two situations as a difference of 20%, so it really pays to save money and pay for things with cash.
Patience
The reason we don’t do things like this is because most of us are not very patient. We want what we want, and we want it now. Thanks to banks with loans or credit cards, we have that option of having it now. I guess we want it so badly that we don’t take the time to think if we really need it, or if there is a better option. Most of the time we could pay cash if we only had the patience to wait and save. As a society we just don’t have patience and must have everything right away. Now we need to look at the after effect of your lack of patience and how you can get out of this mess that we call debt.
Ways to pay debt
There are all kinds of ways that you can pay off debt, but there are two highly recommended ways. You could probably make minimum payments until you are out of debt, but that may take longer than you live. The best way to get out of debt mathematically is to use the debt avalanche method.
Debt Avalanche
With the avalanche method, you will list all your bills out and sort them from the highest interest rate to the lowest. Once you have this figured this out you will pay all of your minimum payments and then add as much extra money as you can to the bill with the highest interest rate until it is paid off. Then you add all the extra money you have to the bill with the next highest interest rate. You continue this until all your debts are paid off. This is a great method for getting out of debt, but it isn’t effective for a lot of people.
Debt Snowball
The method I would recommend for getting out of debt is the snowball method. For this you organize all your debts from the smallest amount owed to the largest. Once again you pay the minimum amount on every bill. For the debt with the smallest balance, you pay as much extra as you can until it is paid off and then move on to the next. If you are super disciplined, the avalanche is the best method for you. Just remember that if you were super disciplined, you would not have any debt. With that said, let’s not pretend that you are disciplined and go with the debt snowball. I will make one exception to this. If you are disciplined and had no debt until you just got married, then you could possibly get away with the avalanche method.
The reason that the snowball method is more effective is because you get quicker wins. When you pay off that first debt, it is typically a quick win and as a bonus you will then have the minimum payment for that debt to add to your margin each month. That extra money will then go to your next biggest debt and it can be very motivating to see your progress. With the avalanche method, you could be paying on your highest interest debt for so long that you end up giving up on getting out of debt.
As I said above, I do recommend the snowball method. Depending on your situation, you could reorder your debts to use a little bit of the avalanche method between 2-3 bills. Let’s look at a few examples to shed some light on what I’m saying.
Hybrid Examples
For the first example, let’s say you can pay $100 extra on your smallest debt each month. For this situation your smallest debt at the time is $900 with a 9% interest rate. Your next smallest debt is $1000 with a 24% interest rate. I’m going to recommend switching the order of those two. It will maybe cost you a month and you will get a much larger win doing it this way.
For the second example, you are still able to pay $100 extra on your smallest debt each month. This time your smallest debt is $2000 with a 15% interest rate, then $6,000 with a 9% interest rate, and the next is $8,000 with a 25% interest rate. You were super lucky this month and ended up getting an extra $10,000 that you can put towards debt. Instead of paying off the $2000 debt, $6,000 debt and $2,000 of the $8,000 debt, you should pay off the $2,000 debt and the $8,000 debt. Either way, you will free up the margin from 2 debts, but this way you will pay much less in interest. Don’t be super rigid with your method, there are times that some minor changes can save you a good amount of money.
Any method is better than minimum payments
All of this might feel a little overwhelming for you. Just remember that any time you are in less debt from month to month, no matter how you organize it, you will be better off. Just do what you can to free yourself from debt. As of yesterday, I’m out of debt except for my mortgage. Believe me when I say, it feels good to not owe any consumer debt.
Change your habits to stop getting into debt
Another thing to think about when it comes to debt is the habits that got you into the situation that you are in. Maybe you spent it frivolously, or something happened, and you didn’t have an emergency fund to cover it. I’m hoping that you have learned a better way to control your money and build the new habits needed to keep moving forward in a positive direction with your finances.
Finance Hack – Use the snowball method to get yourself out of debt.
I hope this helps with your debt journey. Don’t forget that you have multiple ways to pay off debt with the debt avalanche and debt snowball being the primary two. Do what you can to build new habits and set yourself up for the future that you dream of.
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