A-a-avalanche! How to get rid of your debt for good ⛄

3 min readApr 7, 2022

Paying off debt is difficult. Cash flow is affected by soaring prices and interest rate hikes, and it’s easy to become demotivated as time goes on.

But clearing your debt is the only way to become financially independent. We’re here to help: Last week we looked at the snowball method of paying off debt; this week we’re delving into a strategy called the avalanche method. If this method works for you, it might finally get that monkey off your back!

How does it work?

Like the snowball method, the avalanche method also applies to shorter-term debt like car loans, store cards and credit card repayments. It doesn’t apply to mortgages (home loans), as these normally take 20 to 30 years to pay off.

The avalanche method works like this: You pay the minimum repayments on all your short-term debt and use any extra money to pay off the debt with the highest interest rate and fees. Once you’ve paid off that debt, take whatever you were paying and use it to clear the debt with the next-highest interest rate. And so on.

Using the avalanche method, you save as much as possible on interest payments and fees.

Why use this method?

Looking at your monthly bills can be overwhelming. It often feels like you have to pay sums of money into a bunch of different accounts, and you see little progress. Using a specific debt-reduction strategy can help you organise your finances, and more importantly, help you feel like you have a solid plan to get through your bills.

The biggest advantage of the avalanche method, as mentioned, is that it can save you a lot of money on interest payments. At the same time, it can reduce the time it takes to pay off your debts by weeks or even months, giving you financial relief sooner.

What are the challenges?

The main challenge is the self-discipline it takes to put most of your extra money towards paying off debt. It’s hard to say no to that little voice in your head that wants a new pair of shoes or a weekend away. Just remember, if you persevere now and commit 100% then you’ll soon be able to go on that holiday — and do so much more.

Don’t forget about your emergency fund…

Your aim might be to pay off your debt as quickly as possible, but don’t forget that life can be unpredictable, and you need to have some money set aside for emergencies. Work out exactly how much spare cash you have at the end of each month, then commit to a debt-reduction strategy with most of it while also saving a bit for emergencies. It’s hard, but not impossible.

Cut costs where you can

If you can’t seem to find an extra cent to put towards your debt, have a good look at your lifestyle and your finances. Cancel that online streaming service you hardly use, wear the clothes you have instead of buying new ones, and generally try to live more frugally. It’s no fun, but make a few sacrifices now and just wait until you see how great life is when you’re free of debt.

To keep yourself motivated, use 22seven to check your net worth. Watch it grow as you knock out those debts one by one. You can do it!




Thoughts, observations and insights. About money, life and 22seven. Visit 22seven.com