Debt can drain the fun out of life and can even make everyday expenses feel overwhelming.
Whether it’s credit cards, student loans, car payments, or other financial commitments, seeing your hard-earned money disappear quickly can be frustrating. But the good news is, by taking control and making debt repayment a priority, you can break free and regain financial stability.
In this guide, we outline 10 actionable tips that you can use to help you get debt-free and take charge of your finances for good. We also look at when you might need to consider seeking professional debt management help and what your options are if you choose to go down this path.
How can I become debt free?
1. Make a list of all your debts
This can be scary, but the fact is, if you don’t know where all your money is going each month, you can’t start to regain control. Understanding your debts can set you on the right path to overcoming them.
2. Make a priority list
Next, list your debts in order, starting with the highest interest rates through to the lowest. The one at the top of the list is the one costing you the most money. That’s the one you want to get rid of first. For more advice on debt repayment strategies, see our Snowball vs Avalanche method guide.
3. Make your minimum payments
Always make the monthly payments on all your debts, even if it’s the minimum amount. Failure to pay will incur penalties and late fee charges, and also affect your credit rating.
4. Start clearing your debt from the top of the list, working down
Although there are different methods of debt repayment, as discussed above, we recommend first trying to focus efforts on paying the most money off one debt (the one at the top of your list), clearing it as soon as possible, then moving onto the next one.
5. Draw up a spending plan
Not the best way to spend a night in but you’ll reap the rewards. Prioritise the musts from the maybes. Cut back on the maybes and your outgoings will automatically come down.
6. Resist temptation
Leave your credit cards at home when you go out. Impulse spending can cause a lot of damage.
7. Sell some of your unwanted items…
…and use the cash to increase your card payments. It hurts at the time, but seeing that figure going down will make it worthwhile.
8. Cut down
Two of the worst words in the English language, as it usually refers to everything in life you enjoy, but the less money you spend on things like beer, cake, coffee and cinema trips, the more money you save and the less debt you have.
9. Know your triggers
If you tend to spend money online when you’re bored, take up a hobby. Don’t head off to the supermarket when you’re hungry. Delete all the telephone numbers for your local takeaways. Whatever it takes.
10. Build an emergency pot of money
Sounds a bit weird having a little secret stash when you’re trying to pay off debt, but if you’re hit by a sudden unexpected expense, having an emergency fund means you don’t need to load it onto your credit card, which would undo all the good work you’ve done.
When should you seek help for debt?
Knowing when to seek professional help can be the difference between staying in debt and finding financial freedom. If you’re struggling to keep up with minimum payments, facing mounting interest, or generally feeling overwhelmed by the sheer amount of debt attached to your name, it’s time to reach out for help.
Speaking to a professional can feel scary, but just remember that they are trained to give you the very best advice. They won’t judge, and can kick start you on a clear path to getting out of debt. To get advice you can rely on, make sure you speak to a company regulated by the Financial Conduct Authority (FCA).
Who can help with debt management?
If managing your finances has become overwhelming, or you’re finding it difficult to cover day-to-day expenses, MoneyPlus is here to help. We offer a range of debt management solutions designed to get you back on track. Two of the most popular options we provide are Individual Voluntary Arrangements (IVAs) and Debt Management Plans (DMPs).
An IVA is a formal agreement with your creditors to pay off a portion of your debt over a set period, usually five or six years. It helps freeze interest and offers you a clear path out of debt. A DMP, on the other hand, is an informal solution where we work with your creditors to lower your monthly payments, making them more manageable.
If you’re unsure which option is right for you, visit MoneyHelper to get free advice. Alternatively, our team can guide you through the process, providing advice tailored to your financial situation.
