Your debt payoff plan: avalanche, snowball and staying debt-free

Once you can cover your essentials and have a small buffer, it's time to get out of debt on purpose, not just whenever there's money left. A clear method turns a scary pile into a list you knock down one by one.

The avalanche method

Pay the minimum on every debt, then put every extra peso on the debt with the highest interest rate. When it's gone, move that payment to the next-highest rate. The avalanche saves the most money because the most expensive debt disappears first. Credit cards (up to 3% a month) and short-term app loans usually go first.

The snowball method

Pay the minimum on everything, then put every extra peso on the smallest balance. When it's paid, roll that payment into the next smallest. The snowball costs a bit more in interest, but the quick wins keep many people motivated, and a plan you stick to beats a perfect plan you abandon.

Which one should you choose?

• If one debt has a much higher rate than the others, use the avalanche.
• If you feel overwhelmed and need a win soon, start with the snowball.
• Either way, the rules are the same: minimums on all, extra on one, no new debt.

Find the extra money

• Pause one or two non-essentials until the first debt is gone.
• Put part of every windfall (13th month, bonus, tax refund) on the target debt.
• Sell things you don't use.
• When a debt is paid off, don't absorb that money back into spending: add it to the next debt.

Stay debt-free

Most people who get out of debt fall back in because of an emergency. Keep building your emergency fund once the high-interest debt is gone, use credit cards only for what's already in your budget, and give yourself a 24-hour pause before any new installment.

How to do it in Iponista

1. Make sure every debt is in Plan → Installments & paylater or Utang, with its amount and due date.
2. Pick your target debt from the list (highest rate or smallest balance) and give it every extra peso.
3. Log each payment; the remaining balance updates and Ponpon celebrates progress.
4. Create a goal called 'Debt-free!' with the total you owe, and watch the progress ring as it shrinks.

Remember this

Minimums on all, extra on one (highest rate or smallest balance), roll the payment forward, and build your emergency fund so you don't slide back.

Do this today

Choose avalanche or snowball, pick your first target debt, and send one extra payment to it this payday.