As a Munich mom and household CFO, I think of debt paydown like decluttering a hallway: the method has to be simple enough to survive real life. Two popular systems—Snowball and Avalanche—both work. The “best” is the one you’ll actually follow on a busy day with a toddler snack crisis and a late tram.
Below I show both methods with concrete EUR numbers, call out pitfalls, and share copy‑paste scripts to reduce rates or fees. Assumptions: Munich, 2‑adult household, today’s prices as observed locally; interest rates are realistic examples, not offers.
Quick definitions
- Snowball: Pay the smallest balance first for quick wins. After each payoff, roll that freed payment into the next debt.
- Avalanche: Pay the highest interest rate first to minimize total interest.
Both keep minimum payments on all debts to avoid fees/penalties.
Our example debts (EUR)
- Credit Card A: 1,200 € at 19.9% APR, minimum 30 €
- Store Card B: 800 € at 24.0% APR, minimum 25 €
- Car Loan C: 7,500 € at 6.5% APR, minimum 150 €
- Phone Plan D (device + plan): 600 € remaining at 0% promo, minimum 50 €
Monthly amount available for debt beyond minimums: 300 € extra. Total minimums = 255 € (30 + 25 + 150 + 50). Total budgeted for debt = 555 €.
Why these numbers? They reflect common urban household debt shapes: a couple of small, high‑rate cards; one larger, lower‑rate loan; and a 0% plan.
How to choose
- Pick Snowball if you need motivation bumps and visible progress fast. Great if debt feels overwhelming.
- Pick Avalanche if you’re steady and want the mathematically lowest interest cost.
- Hybrid is allowed: pay off one tiny balance for momentum, then switch to Avalanche.
Snowball: smallest balance first Order by balance: Phone Plan D (600, 0%) → Store Card B (800, 24%) → Credit Card A (1,200, 19.9%) → Car Loan C (7,500, 6.5%).
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Month 1 payments:
- D: 50 € minimum + 300 € extra = 350 €
- B: 25 € minimum
- A: 30 € minimum
- C: 150 € minimum
- Total: 555 €
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Month 2:
- D balance ~ 250 € → pay another 250 € (50 € min + 200 € extra), D is gone mid‑month.
- Freed payment: 50 € (D’s minimum) + leftover extra shifts to next debt.
- Redirect the full 300 € extra + 50 € freed to B:
- B: 25 € minimum + 350 € extra = 375 €
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Expected timeline and interest (ballpark):
- D: ~2 months, ~0 € interest (0% promo).
- B: starting at ~800 €, roughly 2–3 months at 24% APR; interest ~20–30 € total if paid quickly.
- A: then absorb 50 € + 25 € + 30 € freed minimums, so extra grows:
- New “snowball” extra ≈ 300 + 50 + 25 + 30 = 405 €.
- A (1,200 € at 19.9%) could clear in ~3 months; interest ~30–40 €.
- C: finally, throw everything at C:
- Payment becomes 150 € minimum + 405 € extra = 555 € to C.
- 7,500 € at 6.5% with 555 €/month clears in ~14–15 months; interest roughly 420–500 €.
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Rough Snowball totals:
- Time to debt‑free: ~21–23 months.
- Total interest: ~470–570 €.
Why Snowball works
- Quick payoff of D and B reduces mental load.
- Seeing one less bill (and fewer due dates) reduces mistakes and late fees.
- Momentum builds as payments “snowball.”
Pitfalls
- You’ll pay a bit more interest than Avalanche if high‑APR balances linger.
- If minimums change (e.g., card calculates min as % of balance), update the plan.
Avalanche: highest interest rate first Order by APR: Store Card B (24%) → Credit Card A (19.9%) → Car Loan C (6.5%) → Phone Plan D (0%).
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Month 1 payments:
- B: 25 € minimum + 300 € extra = 325 €
- A: 30 € minimum
- C: 150 € minimum
- D: 50 € minimum
- Total: 555 €
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Month 2+:
- B clears in ~3 months. Interest ~25–35 €.
- Freed payment = 25 € + 300 € = 325 € shifts to A:
- A payment becomes 30 € + 325 € = 355 €; A clears in ~4 months; interest ~40–50 €.
- Then C:
- Payment to C becomes 150 € + 355 € = 505 € (D still at 50 € min).
- C clears in ~15–16 months; interest ~460–520 €.
- Lastly D:
- After C, the payment to D becomes 50 € + 505 € = 555 €; D clears immediately (it would likely be gone earlier if you choose to pay it off once tiny).
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Rough Avalanche totals:
- Time to debt‑free: ~20–22 months.
- Total interest: ~430–520 €.
Why Avalanche works
- High‑APR interest stops first, lowering total euros paid.
- Particularly strong if the highest‑rate balance is also sizeable.
Pitfalls
- Motivation dip if your first target is not small.
- If a 0% promo expires soon, check the end date—Avalanche assumes it stays 0%.
Side‑by‑side: what changes with the same 555 €/month
- Speed: Avalanche is usually slightly faster (by 1–2 months here).
- Cost: Avalanche saves ~40–60 € in interest over Snowball in this example.
- Motivation: Snowball gives earlier “wins” by removing a whole line item quickly.
Practical tie‑breakers
- If a promo rate ends soon (e.g., 0% turning 19.9% in 3 months), prioritize that debt before the jump—even if Avalanche wouldn’t pick it first.
- If you’ve missed payments recently, stabilize with Snowball to reduce active accounts, then consider switching to Avalanche.
Fast setup checklist (copy‑paste)
- List each debt: name, balance, APR, minimum, due date.
- Confirm any promo end dates and penalty fees.
- Choose Snowball or Avalanche; note the order.
- Set a total monthly amount you can sustain (e.g., 555 €).
- Automate minimums; schedule one extra payment to the current target.
- Each payoff: immediately redirect freed minimums to the next.
- Review if a rate changes, a promo ends, or income shifts.
- Export your spending and check for “leaky” recurring costs you can cancel to boost your extra payment by 10–50 €.
Polite scripts you can use
- Lower interest rate request (bank/issuer):
- “Hello, I’ve been a customer since [year] and always aim to pay on time. I’m focused on paying off my balance faster. Could you review my account for a lower APR or a promotional rate? A reduction would help me pay reliably and stay with you.”
- Late fee waiver (once‑off):
- “Hello, I noticed a late fee on my last statement. I value my account and typically pay on time. Could you offer a courtesy waiver this time? I’ve already set up reminders to prevent this happening again.”
- Payment due‑date move (to align with payday):
- “Hello, could we move my due date to the [date] to align with my salary? This ensures on‑time payments and avoids issues on your end and mine.”
Where to free up 30–100 € quickly (Munich‑style examples)
- Mobile plans: If you’re on 35–45 €/month per line, SIM‑only can be 10–15 €. Two lines can save ~50–60 €/month.
- Streaming bundles: Audit overlaps. Keeping 1–2 services (e.g., 12.99 € + 9.99 €) and pausing others can free 15–25 €/month.
- Insurance check: Liability (Privathaftpflicht) is often 40–70 €/year per adult; check duplicates through employer benefits to avoid paying twice.
- Utilities: If your Stromabschlag is high, submit a current meter reading; a right‑sized installment can lower monthly outflow until the annual reconciliation.
Simple math example: add 50 € to your plan
- Original extra: 300 € → New extra: 350 €.
- Avalanche impact on our example:
- B clears ~1 month faster; A clears ~1 month faster.
- Total interest drops another ~30–60 €.
- Snowball impact:
- Tiny debts disappear even quicker—useful for momentum.
Using Monee (only if it helps you act)
- Mark recurring transactions (rent, subscriptions, utilities) to see the fixed monthly picture.
- Use the monthly overview to spot leaky costs to redirect toward your current target.
- If you share expenses, shared categories help keep everyone aligned on the payoff goal.
- Export data anytime if you want to do deeper interest math or keep a personal archive.
Common pitfalls and how to avoid them
- Missing a minimum: Always automate minimums; it avoids penalties that erase your progress.
- Only paying attention to one card: Track all due dates; reduce the number of active accounts quickly (Snowball) or the costliest first (Avalanche).
- Ignoring promo expiries: Put a reminder for 2–3 weeks before the end date.
- Changing plans too often: Pick a method and stick to it unless a rate changes or income shifts.
Which method should you choose?
- If you need momentum and fewer moving parts soon: Snowball.
- If you’re comfortable with a slightly slower “win” but want maximum savings: Avalanche.
- If you’re torn: Clear one tiny balance Snowball‑style, then switch to Avalanche for the rest.
Final nudge The “right” plan is the one your family can keep without stress. Choose a path, automate the minimums, and celebrate each closed account. Every 10–50 € you reclaim from leaky costs is fuel for the next step.
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