# Compare equal payment budgets


Use this record with the worked examples first. For personal use, keep private financial details in your own secure records; the blank file does not need account numbers or credentials.

| Record field | Your observation |
|---|---|
| Creditor and current balance |  |
| APR and change dates |  |
| Interest calculation method |  |
| Minimum-payment formula |  |
| Due date and urgency |  |
| Promotion / fees / security |  |
| Affordable total monthly payment |  |
| Chosen extra-payment order |  |
| Same-month rollover rule |  |
| Actual payments and revisions |  |

### Calculate a new first month

Try this before reading the answer. Debt D starts at $900 with 18% APR and a $30 minimum. Debt E starts at $300 with 6% APR and a $15 minimum. The total payment budget is $90. Apply APR/12 interest to opening balances, round to cents, then pay minimums and assign all remaining money to the target. Assume no fees or new borrowing.

For each method, identify the target, calculate both payments and ending balances, and reconcile the total. Which method leaves more debt at the higher rate? What happens if next month's affordable budget falls below $45?

### Check both allocations

Interest is $13.50 on D and $1.50 on E. Required payments total $45, leaving $45 extra. Snowball payments are $30 to D and $60 to E, leaving $883.50 and $241.50. Avalanche payments are $75 to D and $15 to E, leaving $838.50 and $286.50. Both totals are $1,125: opening debt of $1,200 plus $15 interest minus $90 paid.

The snowball leaves $45 more at 18% and $45 less at 6%. Holding those balances unchanged for the next interest step creates an unrounded difference of $45 × (18% − 6%)/12 = $0.45. With each account's interest rounded separately to cents, the next month's totals are $14.46 and $14.01, also $0.45 apart. The earlier small-balance payoff and lower interest are different outcomes to compare.

Below the assumed $45 minimum total, there is no extra-payment allocation to optimize. Check actual obligations and hardship options; changing the spreadsheet does not change a creditor's required payment. Once a feasible arrangement exists, restart the projection from verified balances and terms.

In the longer three-debt example, both schedules finish in month 30. Snowball interest is $1,057.61 and avalanche interest $1,021.11. This $36.50 difference applies to those inputs and rollover rules, not to every household.