Get Real: Debt Payoff Strategies That Work


When it comes to debt payoff there are few things that matter more than having a plan. So it stands to reason that one of the first questions that must be answered is: “What’s the plan?” Luckily, there’s nothing new under the sun including paying off debt. There are four main methods to consider.


Pay the minimums

So, here’s the thing. This, technically, works. It’s inefficient and the clear winner is the bank who collects interest for the longest time that is legal. If all spending ceased immediately it could still take more than 8 years to pay off larger balances. Even a $50 balance can stretch into two to three times that amount depending on the contract dictated minimums. So, it works. Eventually. There are other methods that are more in favor the consumer. But you knew that and that’s why you’re here. Let’s go.

Debt Snowball – Momentum

The debt snowball method that has been popularized by Dave Ramsey uses game theory to effectively pay off debt. List all debts in order from smallest balance to largest balance. Throw all of debt payoff income to the smallest balance. Pay the minimums on everything else. Once that’s done rinse and repeat. It’s all about momentum. There’s a lot of quasi-instant gratification that has very real psychological benefits.

Debt Snowflake – Attack Mode

The debt snowflake is Chutes and Ladders where the Debt Snowball is checkers. The snowflake method takes advantage of your ability to find pockets of new or untapped income to apply to debt repayment. For example, assigning the proceeds from a yard sale to paying off the hardware store credit card or using proceeds from doing Lyft, Uber or Moovn to payoff student loans. This method attacks multiple bills at once and makes each new money making task a clear goal to pursue which creates stronger motivation to excel. It works especially for those who like to attack from all sides at once.

Debt Avalanche – Math Motivated

Since we’re using board games– this is chess. List all debts by APR, or interest rate, instead of balance. Pay only minimums on everything except the account with the highest interest rate. Use all found and created income to pay off the highest one. Rinse and repeat. This is perfect for those who are looking for the most efficient payoff order mathematically. You’re saving the most in interest by paying off the accounts with the highest interest first. Caveat: Depending on how where balances are the first account may take longer to be paid off. There’s much to be said for psychological benefits. Know thyself.


The consistent note in each method is tracking. None of this works if without a clear picture of the way things are and a clear goal of the way things should be. It is absolutely imperative that to gather all the information available to and give it a hard, honest look. This clarity and reality check is imperative to start moving in a specific direction with purpose. There are many great tools for this very task.

Pen and Paper – Classic

Don’t count it out. There’s something to be said for using this tried and true method. A lot of something, actually.


It’s also a tried and true method–of the digital sort. A simple spread sheet can track large amounts of data very simply and efficiently. A more robust spreadsheet can have graphs, charts, and integrate new information on a whim. It is entirely customizable and very affordable. (Open Office is free!)

Budgeting Software

The two most popular currently are Mint and You Need A Budget (YNAB). They attack the tracking task from two different directions and each has their benefits.


Mint is generally preferred for a historical review of what has happened and how. Mint will show that 20% of May’s income went to eating out instead of groceries. It will also track balances as they are paid down each month.

You Need A Budget

YNAB is valued for it’s planning function. The emphasis with YNAB is assigning current dollars jobs that march the entire budget towards the larger goals. It will also show 20% of May’s income went to eating out. Then it forces a plan for next month which can be changed as needed.

TNB – What’s Working For Me

YNAB + Debt snowball

Currently, YNAB is my guiding light and is keeping me sane. I know what I have and where it’s going. I had a car repair that I waited to pay cash for. When I pulled out my debit card instead of my credit card I was at once overcome with relief, panic and joy. I knew I was doing the right thing (not using credit). I knew I had planned for it (my YNAB big green numbers in the Car Repair row told me so). And the joy of knowing that I had done the right thing was overwhelming. That’s the benefit of the snowball. Car repair of $520 was nothing compared to knowing I am done paying for it. No interest. The transaction is complete and finished.

What should you do? Whatever works for you! That’s the point. If the goal is reducing your debt then plan your work and work your plan. Listen, don’t let anyone tell you that one of these methods is better than another and definitely don’t let anyone say that one of them is useless. The goal is to payoff debt. When you’re racing the clock go with the avalanche and minimize interest paid. When the going gets monotonous switch it up to the snowball and gain some traction with quick wins. And when you know you are about to do a series of awesome craft fairs/auto exhibits/sell 1,000 widgets to a new company pick a debt and apply your new income liberally to your debts! Pay off that one account that never seems to have the highest interest rate or lowest balance.

It really is up to you. The goal is to pay off the debt. How you do it may change over time based on the needs of the day or month. The key is to keep your eye on the prize and never give up.