What is the debt avalanche method and how does it work?

The debt avalanche method is a debt repayment strategy that involves prioritizing debts based on their interest rates. With this method, you would focus on paying off the debt with the highest interest rate first, while making minimum payments on all other debts. Once the debt with the highest interest rate is paid off, you would move on to the debt with the next highest interest rate, and so on until all debts are paid off.

Here's how it works:

1. Make a list of all your debts, including the balance owed, interest rate, and minimum monthly payment.

2. Order your debts from highest to lowest interest rate.

3. Focus on paying off the debt with the highest interest rate first while making minimum payments on all other debts.

4. Once the first debt is paid off, apply the money you were paying towards that debt (plus any extra you can afford) to the debt with the next highest interest rate.

5. Repeat the process until all debts are paid off.

The debt avalanche method can save you money on interest charges in the long run, but it can be more challenging to stay motivated because it may take longer to see progress on the highest interest rate debt.