Follow Us

Debt can be a significant source of stress and financial insecurity for many people, but some strategies can help you get your debt under control and ultimately pay it off.

Reducing your debt can be challenging, but with the right strategies and a bit of discipline, it’s possible to make progress toward paying off your debt and gaining financial freedom. So, these are the ways to reduce your debt, according to the experts.

How to pay off debt

Rachel Cruze, author of the New York Times bestseller “Love Your Life, Not Theirs,” underscores the need for creating a budget.

“A budget is a plan for your money,” Cruze said. “It helps you identify where your money is going and where you can cut back to free up more funds to put towards your debt.”

Creating a budget can be as simple as listing your expenses, including bills, groceries, and leisure spending, and see where you can make changes to reduce your costs and increase your debt payments.

“By taking control of your money and making a plan, you can start to see progress and make real headway in paying off your debt,” Cruze said.

Where to start

Another effective strategy for reducing debt is to focus on paying off high-interest debts first.

Credit counselor Bruce McClary of the National Foundation for Credit Counseling said these debts, such as credit card debt, can quickly add up if you only make minimum payments.

“By prioritizing these debts and making larger payments towards them, you can save money on interest and pay them off more quickly,” McClary said.

Consolidating your debts into a single loan with a lower interest rate can also be helpful.

“This can simplify your payments and make it easier to keep track of your debt, as well as potentially save you money on interest,” said personal finance expert Michelle Singletary of The Washington Post.

Dealing with high-interest debt

If you’re struggling to make payments, negotiating with creditors is another option.

“If you have a good history of paying your debts on time, you may be able to negotiate a lower interest rate or a payment plan that works better for you,” Singletary said.

Seeking the help of a professional, such as a financial advisor or credit counselor, can also be beneficial. These professionals can help you create a plan to pay off your debt and provide guidance on which strategies will be most effective for your unique situation.

Finally, it’s essential to be mindful of your spending habits and avoid taking on additional debt.

“This may mean cutting back on non-essential expenses, using cash or a debit card instead of credit, or finding ways to increase your income,” Cruze said.