By David Edwards and Abigail Smith-Reece, HUD Certified Counselors
There’s no single “right” way to pay down debt—different strategies work for different financial situations. What matters most is having a clear system, not just good intentions. The snowball method is popular because it builds momentum: you pay off the smallest balance first while making minimum payments on the rest, then roll that payment into the next debt.
Another balanced approach is dividing extra money into thirds—one for past debt, one for present needs, and one for future savings. This helps you reduce debt while still covering essentials and building an emergency cushion, so you don’t fall back into borrowing.
From a mathematical standpoint, PowerPay (or debt stacking) saves the most on interest by targeting the highest-rate debt first and rolling payments forward as each balance is cleared. Ultimately, the best strategy is the one you can stick with consistently.
Struggling to pay your bills? Review our guide on how to handle expenses and see available programs that might be able to help.
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