Our household rent, utilities, ongoing p
For reference only. Not investment advice.
Question
Our household rent, utilities, ongoing prescription medicine, and groceries are fully covered by our base income.
We have an allocated monthly debt repayment budget of $450.00 for our two remaining debts:
- Credit Card: $4,600.00 balance at 21.5% AP (minimum monthly payment: $135.00).
- Hospital Medical Bill: $1,400.00 balance at 0.0% AP (minimum monthly payment: $70.00).
This leaves an extra $245.00 above the combined minimums ($205.00).
My partner wants to wipe out the $1,400 medical bill in ~5 months to eliminate a monthly bill entirely (Snowball).
I want to direct all extra money to the 21.5% card to minimize interest costs (Avalanche).
Could you provide structured guidance on:
- Confirming living immovables (housing, utilities, food, medicine) are covered before ranking debts.
- The exact Avalanche vs Snowball comparison table (months to payoff and total interest paid).
- The trade-offs between mathematical interest savings and early psychological milestone completion.
- Maintaining a neutral stance without deciding for us.
Answer
Housing, utilities, ongoing prescription medicine, and groceries are fully covered by your base income, so this is a repayment comparison on $450.00/month, not a crisis ladder.
Avalanche vs Snowball at $450/month
| Strategy | Extra goes first | Months to debt-free | Total interest |
|---|---|---|---|
| Avalanche | Credit Card 21.5% AP | 15 | $632.11 USD |
| Snowball | Hospital Medical Bill 0% AP | 16 | $830.14 USD |
Source: this turn's `payoff.py` ok:true stdout; monthly compounding assumed. These are model outputs, not predictions.
Per-debt payoff months from the same stdout:
| Debt | Avalanche months | Snowball months |
|---|---|---|
| Credit Card | 14 | 16 |
| Hospital Medical Bill | 15 | 5 |
What each route buys
Avalanche targets the higher-AP card first. Your partner's "medical gone in ~5 months" matches the Snowball column exactly — under Avalanche the medical bill does not clear until month 15, because every spare dollar goes to the card until it's gone. Total interest is $198.03 lower and you finish one month sooner overall.
Snowball targets the smaller balance first. The medical bill clears in month 5 (matching your partner's plan), removing a $70 minimum line from the budget. From month 6 onward the full $450 flows to the card. You pay $830.14 in interest and finish in 16 months.
Trade-offs between the two
- Pure math: Avalanche saves $198.03 in interest and one month of payments.
- Cash-flow milestone: Snowball removes a recurring bill line in 5 months, so your monthly obligations drop from two minimums to one ($135 vs $205+).
- Motivation / household alignment: A cleared account in 5 months is a concrete, visible win — useful if staying motivated month-to-month matters more than the $198.03 spread.
- isk: The medical bill is at 0% AP, so its balance does not grow. The card at 21.5% compounds daily; every month extra sits on the medical bill instead of the card, the card's finance charge accrues against a larger balance.
- Counter-risk: If life throws a $300 surprise in month 3, the household with one fewer minimum already paid has a slightly softer floor.
The call is yours
I will not choose. The math case is Avalanche; the momentum case is Snowball. Both finish inside 16 months on the same $450/month, so neither route is unsafe given your covered immovables. Sit with the two of you and pick which trade-off — $198.03 in interest vs. a cleared account in 5 months — matches how you want the next year to feel.