The mathematically optimal debt order is worth $35

Every guide says pay the highest interest rate first. Run both orders on a realistic set of debts and the difference over two years is smaller than a weekly shop — while the other method clears a debt five months sooner.

Ask how to pay off debt and you get one answer: highest interest rate first. It is called the avalanche method, it is mathematically optimal, and the advice is correct.

It is also worth about thirty-five dollars, and almost nobody says that part out loud.

Three debts, two orders

Take a realistic starting point:

You have $200 a month spare on top of the minimums. Whenever a debt is cleared, its minimum rolls into the next one — that part matters and is the reason both methods accelerate as they go.

Running the whole thing month by month:

Two years of discipline. The mathematically correct order wins by $36 and one month.

What the numbers actually say

The avalanche method is better. It is just better by an amount that does not justify the certainty with which it is usually recommended.

Meanwhile the other column contains a number that no spreadsheet values: four months instead of nine until a debt disappears completely. One fewer account. One fewer minimum payment. One fewer statement.

That difference is not financial, it is behavioural — and behaviour is what decides whether the plan survives to month eleven, which is where most debt plans quietly end.

Why the gap is so small

Two reasons, and both generalise beyond this example.

The biggest debt is usually the cheapest. The $5,000 loan at 9% dominates the balance but generates less interest per dollar than the cards. Both methods pay it last, so both accumulate roughly the same interest on the largest part of the debt.

The rate gap is narrower than the balance gap. 24% versus 18% is a difference of six percentage points on $2,000 — around $10 a month at the start, falling steadily as the balance drops. Over a two-year payoff, small numbers cannot compound into large ones.

The avalanche advantage grows when the rates are far apart and the balances are similar — a $3,000 card at 29% next to a $3,000 loan at 6% is a case where order genuinely matters. Check whether that describes your debts before accepting the generic answer.

How to choose

Pick the highest rate first if the rates differ by more than roughly ten points, or the expensive balance is large, or you have already paid down debt before and know you will finish.

Pick the smallest balance first if this is the first serious attempt, or previous attempts died around month three, or the number of separate debts is what makes the situation feel unmanageable.

Either way, do the two things that matter more than the order: stop adding to the balances, and make the extra payment automatic on payday rather than whatever is left at month end. Those two decisions are worth multiples of the $36.

What this article does not say

It does not say interest rates are irrelevant. On a five-year payoff with a wide rate spread, the same comparison can run into four figures.

It does not say you should not optimise. If both orders feel equally achievable, take the cheaper one — $36 is still $36.

What it says is narrower: the optimal plan you abandon costs far more than the imperfect plan you finish, and the gap between the two methods is small enough that finishing should be the deciding factor.

In Ordiarion the debts module holds the balances, rates and minimums in one place and shows both orders against your own numbers — so the choice is made on your figures rather than on an example from an article.