Case: Sam's way out of debt

Before choosing any payoff method, lay out every debt with its balance, its rate and its required payment. You can't pick an order without seeing the whole board.

Sam owes, on 5 November: the credit card 52,800, the laptop installment 9,500 (5 × 1,900) and the washing machine 3,750 (3 × 1,250) — 66,050 UAH in total. But the total alone hides the key fact: only the card charges interest (3.2% a month), while both installments are at 0%.

That changes everything about the order. Paying off a 0% installment early saves nothing — its cost, if any, was baked into the price long ago — whereas every hryvnia off the card stops 3.2% a month of interest. So the list isn't just a sum; it's a map of where interest is being charged, which is where the next decision has to look.

Both payoff methods make every required payment first; they differ only in where the spare money goes. The debt avalanche sends it to the debt with the highest interest rate, because that's where money is leaking fastest.

In Sam's case the choice is stark: the credit card charges 3.2% a month, the two installments charge nothing. So the avalanche puts every spare hryvnia on the card and pays only the scheduled amounts on the installments. Attacking the most expensive debt first is what minimises the total interest paid.

The alternatives are wrong for a reason: the washing machine first is the snowball (smallest balance, not highest rate); splitting equally dilutes the attack on the costly debt; and the laptop first targets a 0% debt that costs nothing to carry. Highest rate first is the rule — read the rates, not the balances.

When two methods use the same monthly budget, compare them by the total interest each one pays. Here the budget is 6,000 a month either way, so the finish date is the same — December 2027 — and the only difference is the interest bill.

Add the card-interest column: the avalanche pays 15,016.51 over the 14 months, the snowball 15,409.07. The snowball costs 15,409.07 − 15,016.51 = 392.56 UAH more. That's the price of its quick win — clearing the washing machine a month sooner, in December 2026 instead of January 2027.

The gap is small here only because the debts the snowball clears first are small and interest-free. With several expensive debts at different rates, the avalanche's saving would be much larger. The method that keeps you motivated can be worth a small extra cost — but you should always know what that extra is.

With a fixed monthly budget, the date you become debt-free is set by the size of the payment, not by the order you attack the debts in. The order changes how much interest you pay on the way, not when the last hryvnia leaves.

Sam's 6,000 a month clears everything in December 2027 under both methods — 14 months either way. The snowball does clear one small debt sooner (the washing machine in December 2026 rather than January 2027), which feels like progress, but the family is fully debt-free on the same date, and the snowball pays 392.56 more in interest.

So if you want the debt gone sooner, the lever is the budget: raise the 6,000 and the finish date moves closer. Changing avalanche to snowball moves the motivation, and a little of the interest, but not the finish line.