Everyone, regardless of their current financial standing, knows that paying off debt is priority number one. There are many paths to achieving this, but all of them need diligent effort and, ideally, the reward of a successful outcome.
It’s also not a simple task and can take a considerable amount of time. It all depends on your career, your financial circumstances, and your ability to commit to your debt obligations.
The first step is always the most challenging. After then, just like with many other things, you’ll find that you may gradually lower your debt without even noticing it if you make it a habit.
It may be difficult to climb to the peak of your mountain of debt, but once you do, you’ll be rewarded with the peace of mind that comes from knowing that your finances are secure.
The task at hand may appear insurmountable at the moment, but if broken down into smaller, more manageable tasks, it can become much easier to complete.
We’ve compiled a helpful guide with actionable activities you may take toward your debt-reduction or debt-eradication goals. It’s possible that some people have tried these methods before and are currently engaged in the process of reduction, while others are just getting started.
We hope that this list, no matter where you fall on it, will help you in your quest to reduce debt and enhance your current financial situation.
10 Steps how to lower your debt Revealed (2025):
- ☑️ Make the decision to commit to debt reduction
- ☑️ Set up a budget
- ☑️ Reduce any unnecessary expenditure
- ☑️ Find ways to possibly increase your income
- ☑️ Figure out your total debt owed
- ☑️ Find ways to reduce your monthly debt repayments
- ☑️ Make debt repayment your main priority
- ☑️ Calculate a monthly debt budget
- ☑️ Keep an eye on your credit score
- ☑️ Set achievable debt repayment goals
Make the decision to commit to debt reduction
Wanting to get out of debt is the first step. Make the effort to record your monthly expenditures, whether that means using a piece of paper and pen or a computerized spreadsheet.
Even if budgeting isn’t your strong suit, you may still develop more effective practices and begin paying down your debt right now. If you can make this initial choice, the next nine steps will be a breeze.
Set up a budget
In order to keep track of your monthly expenditures and income, it is advisable to create a budget.
This will give you a good picture of your financial situation and help you determine how much you can afford to devote toward paying down your obligations. Even if things don’t look great at first, you have the power to effect improvement that will become more apparent as time passes.
To get started, check your bank account online or print out a statement. Create a list of all of your expenses. Expenses like these can range from those required to maintain a home to those required to go on vacation.
Then, list all the monthly revenue you receive, including salary, benefits, and any other sources of cash flow.
Compute the sum of both columns and compare the results. If you find that your monthly expenses are more than your income, it’s time to make some cuts.
Having more money coming in than going out is the ultimate goal. When you have accomplished this, you will be able to devote more money toward paying down your obligations.
Reduce any unnecessary expenditure
As previously noted, cutting costs is essential. Once you’ve done that, you’ll be in a better position to start paying down your debt.
There are a number of ways to accomplish this, such as:
- Stopping payments on unused subscriptions (streaming, memberships etc.)
- Cost-cutting measures in the food department
- Less frequent restaurant and café visits
- Changing your network providers
Find ways to possibly increase your income
It is possible to increase one’s income to the point where one has more money coming in at the end of the month than going out. Though many of these may only have a temporary impact, they might add up over time.
Long-term improvements are also possible, however, they have more to do with your working style and are highly context- and industry-specific:
- Quit your current line of work and look for something new.
- Find a similar position elsewhere that pays more.
- Kickstart your career advancement by taking evening courses or taking advantage of online training opportunities to bolster your resume.
- If you feel up to it, take on some more contract employment.
- Start working two jobs if you can manage it without major changes to your lifestyle.
Figure out your total debt owed
With a plan laid out, it’s time to assess your financial obligations. Credit card bills, mortgage payments, and other loan or lease terms can all add up to significant sums when paying off expensive purchases. Overdraft costs are only one example of the kind of bank fees that may be included.
Figure out how much you have to put toward all of your debts each month and make a note of it. When you have a grand total (you can get a more accurate picture by looking at the last 12 months), you can figure out how much you need to pay each month to eliminate your obligations. The goal is to make larger payments toward debt relief.
Find ways to reduce your monthly debt repayments
Debt repayment is made more challenging by interest and other fees. These fees can sometimes exceed the principal owed, making it exponentially more challenging to get out of debt.
There are a number of options available to those looking to lower interest rates or consolidate existing debt:
If you want to avoid paying any interest at all, you should move your debt to a credit card that offers 0% APR on balance transfers. Credit card consolidation and loan repayment by wire transfer are common services offered by financial institutions.
This could make it take longer to pay off the total debt, but it will offer you more leeway to make manageable monthly payments.
Try shopping around for re-mortgage offers. You can extend the length of your current mortgage or lower your monthly payment by doing this. This could free up funds that could be applied to other bills.
Make debt repayment your main priority
Another option is to make a list of your debts and rank them in order of priority so that you can pay them off one by one.
Make a list of all your debts and the amount you’re currently paying toward them each month. In addition, you should record the interest or other fees that are associated with each obligation. You should prioritize debts with the highest interest rates and/or fees.
If, for instance, you have a personal loan and a credit card, you could overpay the loan by only paying the minimum payment on the card each month.
This will help you get rid of that debt quickly so you can focus on paying down the rest of your bills but make sure you ask your lender or service provider if overpayments are a possibility before you do so.
Calculate a monthly debt budget
If your credit card or loan allows overpayments, you should use that opportunity to pay off those bills more quickly.
When your salary is sufficient to cover your expenses, you will have extra cash that may be directed toward reducing your debt load. Maybe you can lessen your expenses and use that money toward something else.
If this loan is at the top of your list, then whatever extra money you have should go toward paying it off first. If that’s the case, then you can just put the extra cash toward your debts.
Keep an eye on your credit score
You should take note of your credit score because it will affect your eligibility for future borrowing and may improve your chances of approval. Your credit is likely to be low right now if you have a history of difficulty meeting your financial obligations.
Get a copy of your credit report first. Many providers offer this service at no cost, however, a few may charge a nominal price on a regular basis. Investigate the many reports and pick the one that fits your needs the best.
In many cases, the information in your credit report will put you on the proper path when it comes to raising your score.
Set achievable debt repayment goals
Finally, once you’ve done the math, you may give yourself a deadline to pay off your obligations. One example would be figuring out how many payments would be required to bring a credit card balance back down to zero.
Make sure your targets are attainable before you do anything else. There is no point in consistently overpaying if you are worried about falling behind on other payments.
Instead, keep your payments flexible and avoid overpaying, which could threaten your financial security. Debt reduction may take some time, but it’s worth it in the end.
