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Lesson 3 of 6
Money · Guided lesson

Choose avalanche or snowball

Select a payoff order using both interest math and the behavior you can maintain.

About 26 minutes • Finish with a concrete deliverable
Khan AcademyDebt PayoffYouTube
Course primer

Debt Payoff

From Khan Academy. Watch here or open it on YouTube .

During the course primer, listen for ideas that change how you approach “Choose avalanche or snowball.” Pause once to capture a useful point, then apply it while producing a ranked payoff queue with the reason for the method and a clearly named first target.
Before you begin

What this lesson is really solving.

Select a payoff order using both interest math and the behavior you can maintain. This is lesson 3 because later decisions depend on a ranked payoff queue with the reason for the method and a clearly named first target. Avalanche optimizes cost; snowball optimizes early wins. Consistent execution matters more than arguing about the label. Use your own numbers, files, environment, and constraints so the result survives outside the course.

Why this works

Understand the idea before touching the steps.

Avalanche optimizes cost; snowball optimizes early wins. Consistent execution matters more than arguing about the label.

Do this

Follow these steps in order.

Take the action in each step; then use the deliverable below to prove the lesson is finished.

  1. 1

    Sort the verified inventory once by APR and once by balance while keeping every minimum active.

  2. 2

    Estimate the first payoff milestone and total interest under each method using conservative monthly extra cash.

  3. 3

    Choose avalanche when cost reduction will keep you engaged, or snowball when closing an account quickly will strengthen follow-through.

  4. 4

    Write tie-breakers for promotional expirations, secured-property risk, employer requirements, or court-ordered obligations.

Worked example

See the standard in context.

Jordan chooses avalanche, but moves the expiring 0% card ahead of a slightly higher-rate balance because deferred interest would begin before the projected payoff date. The learner saves a ranked payoff queue with the reason for the method and a clearly named first target and notes the evidence or assumption behind the choice so it can be reviewed and improved later.

Quality check

Inspect before you move on.

  • The finished work visibly includes a ranked payoff queue with the reason for the method and a clearly named first target.
  • You tested the work against this common failure: Changing targets whenever a statement, advertisement, or stressful phone call creates a new sense of urgency.
  • Another person could verify this mastery standard: You can explain why the first target outranks every other balance while all minimums remain protected.
Make it real

Your deliverable

A ranked payoff queue with the reason for the method and a clearly named first target.

Common mistake

Watch for this

Changing targets whenever a statement, advertisement, or stressful phone call creates a new sense of urgency.

You’re ready when

Prove it—don’t just recognize it.

You can explain why the first target outranks every other balance while all minimums remain protected.

Objective evidence · 3 questions

Quick knowledge check

Answer from the lesson—not from confidence alone. Score at least 2 of 3 to unlock completion.

Not yet passed

This curriculum-aligned check is scored automatically and stored with your account when signed in. It is an objective learning signal, but it has not yet been independently validated as a standardized assessment.

1Which action belongs in the recommended process for “Choose avalanche or snowball”?
2Which result is the clearest evidence that this lesson’s work is complete?
3Which choice matches the failure this lesson specifically warns against?
0 of 3 answeredEach question measures the action, evidence, or failure condition taught above.
Useful for this course

Tools, templates, and references

Debt cash-flow calculatorTest the monthly cushion available for minimums, buffer, and the next extra payment.
Debt-control workspaceUse the editable tracker and planning sheets in the Excel toolkit.
Check current detailsReferences reviewed September 9, 2026. Lesson exercises are editorial synthesis; official rules come from the linked sources.
Consumer.gov — Debt explainedConsumer.gov — Getting help with debt
3
One check remains

Pass the knowledge check above first.

Completion unlocks after a score of 2 out of 3. Then confirm that you produced the lesson deliverable.

Go to the knowledge check