Basements offer a coveted, spacious area to relax and spend time with your family. Whether you choose to make this space into a game room or a home theater, it can be challenging to make the lower level of your home feel truly cozy. Basement rooms tend to be notably colder than the rest of a house, and you might wonder if it’s normal how frigid this space can feel. We spoke to a home heating and cooling expert to get the inside scoop on why a basement might be cold and how to keep your home warm and cozy.

“Basements tend to be a naturally cold place within the home because they’re typically constructed with concrete, which absorbs and retains cold — especially during the winter months — and they often lack sufficient insulation to prevent heat loss,” Steve Clemente, president and COO of One Hour Heating & Air Conditioning, shared with House Digest in an exclusive interview.

There are a lot of factors that can play into why a basement might be cold. To tackle this issue, it’s vital to understand these causes and rule out any potential underlying issues. “Cold air also naturally sinks, while warmer, lighter air rises, leaving lower levels of the home like basements and ground floors feeling noticeably cooler than upper levels,” Clemente emphasized. “Basement temperature issues can also be tied to broader home comfort challenges, including reduced HVAC performance caused by blocked vents or filters, as well as leaks or damage within the ductwork.”

When is a cold basement an issue?

There is no need for immediate concern if your basement is cold. Most basements will be a bit cooler than the rest of your home. There are, however, certain factors that may raise concern. Structural and HVAC issues are problems you should rule out to ensure your space is truly just a normal, cold basement.

“If a basement is simply naturally cold, and there are no structural concerns such as cracks in the foundation or insulation gaps, and the home’s HVAC system is operating efficiently, homeowners who don’t mind the lower temperature may not need to take action,” expert Steve Clemente shared exclusively with House Digest. “However, if the cold temperature is caused by structural concerns, blocked vents or filters, leaks within the ductwork, or other HVAC inefficiencies and damage, it’s important to address the issue.”

If you have an HVAC issue in your basement, this will impact your entire home. You may be dealing with a larger efficiency issue that you’ll need to consult a professional about as soon as possible. Clemente warned that failing to address HVAC problem can lead to “higher energy bills, humidity and air quality issues, frozen pipes, and even system breakdowns.”

How to address issues with a cold basement

HVAC professional Steve Clemente explained exclusively to House Digest, “To ensure the home’s HVAC system is operating safely and efficiently, and there are no larger home comfort concerns at play, homeowners should schedule a seasonal evaluation with a trained technician … An HVAC technician can inspect your system’s vents and filters to ensure they’re clean and unblocked, assess ductwork for leaks or damage, and address any other issues that may be preventing the system from heating the lower levels of the home effectively.”

Once a trained professional rules out any pressing issues such as air leaks or foundation cracks, you can explore other solutions if you want a warmer basement. For instance, you can have a professional add or extend registers for more efficient heating. You can also opt for a good old-fashioned space heater. However, Clemente warned that while they require no professional installation, they can be less energy efficient for larger spaces and can’t be left on for long stretches of time. 

Luckily, there are other easy ways to heat a basement without an electrical space heater. “Sealing cracks along the foundation of the home and adding or improving existing installation are other cost-effective steps that can help prevent heat loss and make a noticeable difference in basement temperature levels,” Clemente explained. He went on to mention pellet stoves as another type of energy-efficient, low-maintenance heating solution to explore

Market ups and downs are a normal part of investing. But once you hit retirement, those swings feel a lot riskier—especially when you’re pulling money out of your portfolio. That’s where a volatility buffer comes in.

Think of it as a backup plan that gives you income during market downturns. A properly designed volatility buffer strategy can help you maintain steady income during bear markets—without having to sell investments at a loss.

In this post, we’ll break down what a volatility buffer is, how it works, and why it could be the safety net your retirement plan needs.

🔑 Key Takeaways

• Sequence of returns risk can derail your retirement if losses hit early.
• A volatility buffer provides stable income during market downturns.
• Common buffer tools: cash, short-term bonds, annuities, IULs, and more.
• Set clear triggers for when to use and refill your buffer.
• Diversification or bonds alone aren’t enough—buffers add protection.

The Problem: Sequence of Returns Risk

When you’re saving for retirement, average market returns matter. But when you’re withdrawing money in retirement, the order of those returns matters even more.

This is called sequence of returns risk—and it can crush a retirement portfolio if poor market performance hits early on. Even if your long-term average return is the same, bad timing in the early years can cause your savings to run dry far too soon.

Research shows that:

• Retirees who face negative returns in the first 5 years of retirement are over 30% more likely to deplete their assets prematurely than those who face losses later.
• For a 60/40 portfolio withdrawing 4% annually, starting retirement during a bear market can reduce the success rate of the plan by 20–25%.

That’s why a strategy like a volatility buffer isn’t just a luxury—it’s essential protection against bad timing.

What Is a Volatility Buffer?

A volatility buffer, as the phrase suggests, is a buffer against market volatility—a financial cushion that helps retirees weather market downturns without derailing their income plan.

Instead of selling investments at a loss, you pull from this buffer to maintain income and give your portfolio time to recover.

A volatility buffer can:

• 💸 Keep your income steady during market dips
• 🚫 Prevent selling investments at a loss
• 📉 Reduce the risk of running out of money
• 🛡️ Protect your long-term retirement plan

It’s a simple strategy with powerful results—especially when combined with a well-thought-out withdrawal strategy.

Types of Volatility Buffers

There’s no one-size-fits-all approach to building a buffer for retirement income stability. It’s about choosing reliable, non-market-correlated assets that you can lean on during rocky times. Common types include:

1. 💵 Cash Reserves – High-yield savings accounts represent the most straightforward buffer option. They offer FDIC protection up to $250,000 per account, complete liquidity, and competitive interest rates that often adjust with Federal Reserve policy changes. The primary advantages include safety, accessibility, and simplicity.
2. 📄 Short-Term Bonds or Bond Ladders – Short-term bonds are a popular choice for a volatility buffer since they’re less sensitive to interest rate changes than long-term bonds. A bond ladder takes this further by spreading investments across staggered maturities—like one, two, and three years—providing regular access to cash for income or reinvestment.
3. 🛡️ Fixed Indexed Annuities – FIAs offer principal protection with the potential for market-linked growth. Your principal is guaranteed by the insurer, while returns are based on index performance. As part of the evolution of annuities, FIAs blend traditional income guarantees with modern market-linked growth—making them a smart fit for long-term volatility buffer strategies.
4. 👨‍👩‍👧‍👦 Cash Value Life Insurance – An IUL for retirement builds cash value that can be accessed tax-free through policy loans, offering a tax-efficient buffer during market downturns. This allows you to borrow against the policy without triggering taxes, while still maintaining a death benefit and insurance coverage.
5. 🏡 Reverse Mortgages – For retirees with substantial home equity, a reverse mortgage line of credit offers a unique buffer strategy. It provides tax-free access to cash without selling your home or adding monthly payments. While not for everyone, it’s a valuable option to consider as part of your retirement toolkit.

How to Use a Volatility Buffer in Retirement

A volatility buffer isn’t just about having extra cash—it’s about knowing exactly when and how to use it to cover expenses in retirement and protect your long-term income plan.

To make the most of your buffer, set up activation triggers—specific conditions that tell you when to pause portfolio withdrawals and use your buffer instead. Then, just as importantly, define recovery triggers to guide when to return to normal withdrawals.

🧭 Set Clear Activation Triggers

Having rules in place removes the guesswork and helps you act rationally during emotionally charged market events. Here are three types of triggers to consider:

1. 📉 Market-Based Triggers: Use your buffer when the market experiences a significant drop. Examples:
   • Major index (e.g., S&P 500) declines 10% or more
   • Market enters official bear market territory (down 20% or more)
   • 3-month rolling average return is negative

Why it works:
Protects you from selling stocks during deep downturns and gives your portfolio time to recover.

2. 📊 Portfolio-Based Triggers: Base it on the value or condition of your personal retirement accounts. Examples:
   • Your total portfolio falls 10%+ from its last high
   • Your equity allocation drops below a pre-set threshold
   • Your withdrawal rate (as a % of remaining assets) jumps above 5–6%

Why it works:
Customizes the trigger to your personal situation, not just market headlines.

3. 💵 Income Need Triggers: Use your buffer when your portfolio can’t safely meet your income needs without exceeding a sustainable withdrawal rate. Examples:
   • Your planned withdrawal for the year exceeds 4–5% of your portfolio
   • Market returns + income needs = projected shortfall

Why it works:
Ensures you maintain a sustainable drawdown rate over the long haul.

🟢 When to Resume Normal Withdrawals

Just as important as knowing when to activate your buffer is knowing when to switch back to your portfolio.

Recovery Triggers:

• Markets have regained pre-decline levels
• Your portfolio balance has recovered to a target value
• Positive returns resume over a 3–6 month period

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💡 Need Help Creating Your Volatility Buffer?

Creating the right volatility buffer strategy starts with knowing your income needs, risk exposure, and available tools.

A licensed financial professional can help you evaluate your options, and design a plan that protects your income through every market cycle.

Schedule a Free Consultation Today

How Much Should You Set Aside?

A common guideline is to hold 1 to 3 years’ worth of retirement income in your buffer. But the exact amount depends on:

• Your monthly income needs
• How much guaranteed income you already have (Social Security, pensions, annuities)
• Your risk tolerance and market exposure
• Whether you’re early or late in retirement

Common Misconceptions

• “I’m diversified. I don’t need a buffer.” – Diversification helps, but it doesn’t eliminate sequence of returns risk. You still need a plan for where to pull money from when markets are down.
• “Bonds are enough.” – Not necessarily. Bond values can drop too, especially in rising interest rate environments. A true volatility buffer includes safe, liquid, and stable assets.
• “Volatility buffers are only for conservative investors.” – Buffers benefit all investors by giving their riskier assets space to recover. Even aggressive investors can benefit from strategic reserves.
• “I’ll just cut spending if the market crashes.” – That sounds good in theory—but in practice, most retirees have fixed expenses. A buffer gives you flexibility without forcing uncomfortable lifestyle changes.

Final Thoughts: Build Your Buffer Before You Need It

The early years of retirement are the most vulnerable. And the best time to build your buffer is before you need it. Don’t wait for a downturn to find out your plan wasn’t as resilient as you thought.

A volatility buffer isn’t just a backup plan—it’s a proactive strategy to protect your income, preserve your portfolio, and give you the confidence to stick with your plan through any market cycle. It can mean the difference between running out of money and riding out the storm.

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Retirement has changed. Are you prepared? Learn how to build lasting and reliable income.

Frequently Asked Questions

When should I use my volatility buffer?

Use your buffer when the market is down significantly or your portfolio has lost value—especially if withdrawing from investments would lock in losses. Look for activation triggers like a 10%+ market decline or a spike in your withdrawal rate.

What’s the difference between a volatility buffer and an emergency fund?

An emergency fund is typically for unexpected expenses, while a volatility buffer is a planned reserve designed to replace income during market downturns. Both are important, but they serve different purposes.

Do I need a volatility buffer if I have a pension or annuity?

If your guaranteed income sources (like pensions, Social Security, or annuities) cover most or all of your expenses, you may need a smaller buffer—or none at all. But if you rely heavily on investments, a buffer is highly recommended.

Are volatility buffers only for the wealthy?

No. Volatility buffers benefit retirees at all wealth levels. In fact, they may be even more important for middle-income retirees, who have less margin for error. Whether you have $500,000 or $2 million saved, a buffer provides critical flexibility and protection when you need it most.

In 2010, Thomas Thwaites decided he wanted to build a toaster from scratch. He walked into a shop, purchased the cheapest toaster he could find, and promptly went home and broke it down piece by piece.

Thwaites had assumed the toaster would be a relatively simple machine. By the time he was finished deconstructing it, however, there were more than 400 components laid out on his floor. The toaster contained over 100 different materials with three of the primary ones being plastic, nickel, and steel.

He decided to create the steel components first. After discovering that iron ore was required to make steel, Thwaites called up an iron mine in his region and asked if they would let him use some for the project.

Surprisingly, they agreed.

The Toaster Project

The victory was short-lived.

When it came time to create the plastic case for his toaster, Thwaites realized he would need crude oil to make the plastic. This time, he called up BP and asked if they would fly him out to an oil rig and lend him some oil for the project. They immediately refused. It seems oil companies aren’t nearly as generous as iron mines.

Thwaites had to settle for collecting plastic scraps and melting them into the shape of his toaster case. This is not as easy as it sounds. The homemade toaster ended up looking more like a melted cake than a kitchen appliance.

This pattern continued for the entire span of The Toaster Project. It was nearly impossible to move forward without the help of some previous process. To create the nickel components, for example, he had to resort to melting old coins. He would later say, “I realized that if you started absolutely from scratch you could easily spend your life making a toaster.”

Don’t Start From Scratch

Starting from scratch is usually a bad idea.

Too often, we assume innovative ideas and meaningful changes require a blank slate. When business projects fail, we say things like, “Let’s go back to the drawing board.” When we consider the habits we would like to change, we think, “I just need a fresh start.” However, creative progress is rarely the result of throwing out all previous ideas and innovations and completely re-imagining of the world.

Consider an example from nature:

Some experts believe the feathers of birds evolved from reptilian scales. Through the forces of evolution, scales gradually became small feathers, which were used for warmth and insulation at first. Eventually, these small fluffs developed into larger feathers capable of flight.

There wasn’t a magical moment when the animal kingdom said, “Let’s start from scratch and create an animal that can fly.” The development of flying birds was a gradual process of iterating and expanding upon ideas that already worked.

The process of human flight followed a similar path. We typically credit Orville and Wilbur Wright as the inventors of modern flight. However, we seldom discuss the aviation pioneers who preceded them like Otto Lilienthal, Samuel Langley, and Octave Chanute. The Wright brothers learned from and built upon the work of these people during their quest to create the world’s first flying machine.

The most creative innovations are often new combinations of old ideas. Innovative thinkers don’t create, they connect. Furthermore, the most effective way to make progress is usually by making 1 percent improvements to what already works rather than breaking down the whole system and starting over.

Iterate, Don’t Originate

The Toaster Project is an example of how we often fail to notice the complexity of our modern world. When you buy a toaster, you don’t think about everything that has to happen before it appears in the store. You aren’t aware of the iron being carved out of the mountain or the oil being drawn up from the earth.

We are mostly blind to the remarkable interconnectedness of things. This is important to understand because in a complex world it is hard to see which forces are working for you as well as which forces are working against you. Similar to buying a toaster, we tend to focus on the final product and fail to recognize the many processes leading up to it.

When you are dealing with a complex problem, it is usually better to build upon what already works. Any idea that is currently working has passed a lot of tests. Old ideas are a secret weapon  because they have already managed to survive in a complex world.

Iterate, don’t originate.

Debt snowball can be an uplifting way to tackle debt. You prioritize loans from smallest to largest and gain motivation as you pay off debts quickly.

With the debt snowball method, you pay off your debt with the smallest balance first. Once that’s paid, you roll the amount that was going toward that bill into paying off your next-smallest debt.

With this method, you still make the minimum payment on all of your debts. The key is to add whatever extra money you can spare toward the account with the smallest balance.

The amount you’re able to pay toward debt grows as you close out loans. You know, like a snowball rolling down a hill that picks up more snow with every turn.

How to do debt snowball

1. List your debts (not including your mortgage) in order of smallest to largest balance. Ignore interest rates.
2. Pay the minimum monthly payment for every debt.
3. Calculate how much extra money you can devote to debt payoff. 
4. Put that extra cash toward your smallest debt until you pay it off — even if you are paying more interest on a different one.
5. Next, take the entire amount you were paying toward it (monthly minimum, plus the additional cash) and target the next-smallest debt.
6. As you knock off debts, you can put all the freed-up money toward the next one in line.

Debt snowball example

Let’s say you have the following debts and can add an extra payment of $200 per month:

• A $1,200 hospital bill with no interest.
• A $3,000 credit card balance at 15.9% interest.
• A $5,000 credit card balance at 22.9% interest. 

Pay the minimum on all balances, and add the extra $200 to the $1,200 hospital bill first, even though the credit cards are charging more in interest. The goal is to get quick wins and build momentum.

Who should use the debt snowball method?

Consider the debt snowball method if you’re motivated by small wins. This approach can provide the early satisfaction of seeing debts wiped out one by one.

It’s mindset over math. Sure, paying down higher-interest rate debt first makes numerical sense. But going small and actually closing out loans can give you the satisfaction to keep going.

Meanwhile, the debt avalanche strategy is more about the numbers. It has you prioritize paying off high-interest debt first to save the most money. While this method can indeed save you more over time, it can take longer to get the first debt paid off.

If your unsecured consumer debts — such as credit cards and personal loans — would take more than five years to pay, consider exploring debt relief options.

Debt snowball pros and cons

As you’re thinking about whether this is the strategy for you, consider the advantages and disadvantages.

Pros

Creates early wins.

Easy to understand and track.

Works well for people who have trouble staying motivated.

Cons

You might pay more interest than with the debt avalanche.

Not ideal if you have big balances with high interest rates.

Add ‘debt snowflakes’ to your snowball

“Debt snowflakes” are small daily savings. For example, cutting out one restaurant meal per week and putting what you’d spend there toward a debt payment is a snowflake. Pack that onto your growing snowball because every little bit counts.

Look for ways to free up more money

Speed up your snowball-rolling by putting more money toward debt. You could start a side hustle to earn more. You could also negotiate with service providers to spend less on bills like internet and cell phone.

A recent NerdWallet study found that the top two most cited debt payoff strategies for Americans who have ever had revolving credit card debt are spending less money (46%) and increasing income (35%), both of which could help you add cash to debt payments.

Additionally, you can try to get lower rates on larger, high-interest debts. Debt consolidation, which combines multiple debts into a single payment, usually at a lower interest rate, could be an option.

• You may be able to transfer a credit card balance to a lower-rate card, or one with a 0% introductory APR.
• You could also look into a debt consolidation loan.

Future-Proof Gifts: Savings Bonds for Grandchildren

Looking for a meaningful gift that stands the test of time?

Buying savings bonds for grandchildren is a fantastic way to show your love while investing in their future. Unlike toys that may break or clothes they’ll outgrow, a savings bond keeps growing—just like your grandchildren!

Savings bonds can also help teach kids about money, patience, and saving for the future. In this guide, we’ll walk you through what savings bonds are, why they’re such a thoughtful gift, how to buy them, and how to transfer them when the time is right.

What Are Savings Bonds?

Savings bonds are simple, safe investments issued by the U.S. government. Think of them as a way to loan money to Uncle Sam, and in return, the government pays you interest. Over time, the bond becomes worth more than what you originally paid.

• Series EE Bonds – These bonds double in value after 20 years.
• Series I Bonds – These bonds earn interest and help protect against inflation, so their value keeps up with rising prices.

Both types of bonds are super safe, making them a reliable choice for a child’s future.

Why Savings Bonds Make a Great Gift for Grandchildren

Savings bonds are more than just money. They’re a lesson, a promise, and a thoughtful way to say, “I’m thinking about your future.” Here’s why they’re such a great gift:

• Teach Financial Lessons – Kids learn about saving, waiting, and how money can grow.
• Build Future Value – Over time, the bond will be worth more than its original purchase price.
• Perfect for Milestones – They’re ideal for big expenses like college tuition, a first car, or other important milestones.
• Show Thoughtfulness – A savings bond lasts for years, reminding your grandchild of your love and care.
• Safe and Sound – Backed by the U.S. government, they’re one of the safest investments around.

Where to Buy Savings Bonds for Grandchildren

Gone are the days of walking into a bank to buy a paper savings bond. Today, it’s all done online through the TreasuryDirect website. This is the official U.S. government website for purchasing savings bonds and other treasury securities.

While savings bonds are no longer available in paper form at banks or credit unions, you can easily purchase them online through a simple process.

How to Buy Savings Bonds for Grandchildren: Step-by-Step

Follow these steps to buy a savings bond for your grandchildren:

1. Set Up a TreasuryDirect Account – To purchase savings bonds, you’ll need to go to the TreasuryDirect.gov website.
   • Click on Open an Account.
   • Follow the instructions to provide your name, email, and bank account information.
   • Choose a password and security questions for your account.

This will be your account for buying and managing savings bonds.

2. Set Up a Gift Savings Bond – Once your account is ready, you can buy a bond as a gift.
   • Log in to your TreasuryDirect account.
   • Click on the BuyDirect option.
   • Choose the type of bond you want to purchase – EE Bond or I Bond.
   • Enter the amount you want to spend (you can buy bonds for as little as $25).
   • Select This is a Gift and provide your grandchild’s details:
     • Their full name
     • Social Security number (ask the parents for this if you don’t have it)
   • Review the information and confirm the purchase.
3. Deliver the Gift – Since savings bonds are now digital, you won’t receive a paper bond. Instead, the bond will be held in your TreasuryDirect account until your grandchildren have their own account.
   
   To give the bond:
   • Let your grandchildren and their parents know you bought it.
   • When your grandchildren are ready, they can open their own TreasuryDirect account and you can transfer the bond to them.

If you want to give something physical, print a certificate with details about the gift. TreasuryDirect offers templates you can use to make the gift feel extra special.

Tips for Gifting Savings Bonds to Grandchildren

Here are some helpful tips to make the process even smoother:

• Start Small – You can buy savings bonds for as little as $25, so it’s affordable for any budget.
• Add a Personal Touch – Print out a gift certificate or write a heartfelt note explaining why you bought the bond.
• Think Long-Term – Savings bonds are meant to grow over time, so they’re a great choice for milestones like college or a first home.
• Check the Limits – You can buy up to $10,000 in bonds per year, per person.

Transferring Savings Bonds to Your Grandchildren

When your grandchildren are ready to manage their own money, it’s time to transfer the bond. Here’s how:

1. Ensure They Have a TreasuryDirect Account – Your grandchild (or their parent) will need to open their own TreasuryDirect account. This is a quick process, similar to how you created your account.
2. Initiate the Transfer
   • Log in to your TreasuryDirect account.
   • Select ManageDirect, then click Transfer Securities.
   • Choose the bond you want to transfer and enter your grandchild’s account information.
   • Confirm the transfer.

Once the transfer is complete, the bond will appear in your grandchild’s TreasuryDirect account. They can then decide when to redeem it.

The Bottom Line: A Gift That Grows

Giving a savings bond isn’t just about the money. It’s about planting a seed for your grandchildren’s future and showing them that you believe in their dreams. With every year that passes, the bond’s value grows—and so does the love and care behind it.

Whether you buy an EE Bond or an I Bond, your grandchildren will benefit for years to come. And who knows? One day, they might thank you for helping them pay for college or buy their first car.

So next time you’re looking for a gift, skip the toy aisle and give something that lasts. A savings bond is more than just a present; it’s a promise to help them reach their potential.

Debt snowball can be an uplifting way to tackle debt. You prioritize loans from smallest to largest and gain motivation as you pay off debts quickly.

Updated Feb 23, 2026
Fact Checked

With the debt snowball method, you pay off your debt with the smallest balance first. Once that’s paid, you roll the amount that was going toward that bill into paying off your next-smallest debt.

With this method, you still make the minimum payment on all of your debts. The key is to add whatever extra money you can spare toward the account with the smallest balance.

The amount you’re able to pay toward debt grows as you close out loans. You know, like a snowball rolling down a hill that picks up more snow with every turn.

How to do debt snowball

1. List your debts (not including your mortgage) in order of smallest to largest balance. Ignore interest rates.
2. Pay the minimum monthly payment for every debt.
3. Calculate how much extra money you can devote to debt payoff. 
4. Put that extra cash toward your smallest debt until you pay it off — even if you are paying more interest on a different one.
5. Next, take the entire amount you were paying toward it (monthly minimum, plus the additional cash) and target the next-smallest debt.
6. As you knock off debts, you can put all the freed-up money toward the next one in line.

Debt snowball example

Let’s say you have the following debts and can add an extra payment of $200 per month:

• A $1,200 hospital bill with no interest.
• A $3,000 credit card balance at 15.9% interest.
• A $5,000 credit card balance at 22.9% interest. 

Pay the minimum on all balances, and add the extra $200 to the $1,200 hospital bill first, even though the credit cards are charging more in interest. The goal is to get quick wins and build momentum.

Who should use the debt snowball method?

Consider the debt snowball method if you’re motivated by small wins. This approach can provide the early satisfaction of seeing debts wiped out one by one.

It’s mindset over math. Sure, paying down higher-interest rate debt first makes numerical sense. But going small and actually closing out loans can give you the satisfaction to keep going.

Meanwhile, the debt avalanche strategy is more about the numbers. It has you prioritize paying off high-interest debt first to save the most money. While this method can indeed save you more over time, it can take longer to get the first debt paid off.

If your unsecured consumer debts — such as credit cards and personal loans — would take more than five years to pay, consider exploring debt relief options.

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Debt snowball pros and cons

As you’re thinking about whether this is the strategy for you, consider the advantages and disadvantages.

Pros

Creates early wins.

Easy to understand and track.

Works well for people who have trouble staying motivated.

Cons

You might pay more interest than with the debt avalanche.

Not ideal if you have big balances with high interest rates.

Add ‘debt snowflakes’ to your snowball

“Debt snowflakes” are small daily savings. For example, cutting out one restaurant meal per week and putting what you’d spend there toward a debt payment is a snowflake. Pack that onto your growing snowball because every little bit counts.

Look for ways to free up more money

Speed up your snowball-rolling by putting more money toward debt. You could start a side hustle to earn more. You could also negotiate with service providers to spend less on bills like internet and cell phone.

A recent NerdWallet study found that the top two most cited debt payoff strategies for Americans who have ever had revolving credit card debt are spending less money (46%) and increasing income (35%), both of which could help you add cash to debt payments.

Additionally, you can try to get lower rates on larger, high-interest debts. Debt consolidation, which combines multiple debts into a single payment, usually at a lower interest rate, could be an option.

• You may be able to transfer a credit card balance to a lower-rate card, or one with a 0% introductory APR.
• You could also look into a debt consolidation loan.