The Debt Avalanche: Pay Highest Interest First

The Problem

You have multiple debts and don't know which to pay first. Money goes everywhere, nothing shrinks.

The Hack

List all debts by interest rate (highest to lowest). Pay minimums on everything. Put ALL extra money toward the highest-rate debt. When it's gone, roll that payment to the next.

Why It Works

Mathematically, this saves the most money because you eliminate the most expensive debt first. High-interest debt compounds faster — killing it first stops the bleeding.

Pro Tips

• The avalanche is mathematically optimal
• List: credit cards (18-25%), personal loans (8-15%), student loans (4-7%), mortgage (3-7%)
• Even $50 extra/month toward the top debt accelerates payoff dramatically
• Use undebtit.com to calculate your exact payoff date