Maybe I’m a weirdo, but I hate being in debt. I avoid it like the plague. Still, I’ve had it: student loans, surprise credit card balances, the occasional paycheck gap that spiraled into a late fee spiral.

When I was younger, I had only one credit card and I was the golden standard of responsible. I only spent what I already had in my bank account, and promptly paid back my balance at the end of the billing cycle. But my approach crumbled the moment I lost my source of income and as a young person It’s pretty unusually not to be living right up against your means. Layoffs didn’t care about my perfectly laid plan and good intentions.

Around the same time I had a medial emergency, and in all the kerfuffle I was taken to the hospital in an ambulance. Long story short, they didn’t properly bill me for that ride, and I found out 2 years later that this bill had been sent to collections. This all compounded with the fact that due to health stuff I had to drop out of university.

Eventually I clawed my way back to stability. And many years later I made it back to University to graduate. No matter how much I willed it the debt didn’t magically vanish, it lingered like a stubborn stain on my favorite shirt. What eventually helped was getting serious about paying it off. I picked a payoff strategy and stuck with it.

If you’re dealing with credit cards, student loans, car payments, or all of the above, then you and I have something in common. Here is the guide to what I’ve learned. Not everything I mention will universally apply to everyone, but these are the tools and ideas that have helped me to become debt free.

Face the Numbers

Before diving into specific strategies, it’s essential to get a clear picture of your current debt landscape. This foundation will help you make informed decisions about which approach will work best for you.

Build your Debt Inventory

Start by gathering information about all your debts. Create a spreadsheet or use a debt tracking app to record:

  • Who you owe
  • How much
  • Interest rate
  • Minimum payment
  • Due Date

Yes, this sucks. Yes do it anyways.

Run the Numbers

The helpful metrics:

  • Total debt balance - This number may be disheartening, and make your stomach turn. You’ve got this.
  • Average interest rate - Higher = more urgency
  • Debt-to-income ratio - How much of your income goes to debt every month?
  • Estimated payoff date - If you only pay minimums, when will you be free?

These number are not meant to cause dread or shame, but instead they’re a baseline. Now we can talk strategies.

Pick a Payoff Plan That Works (for you)

There’s no one-size-fits-all here. Some methods save the most money. Others give you the motivational spark to keep going. I tried a few before finding what actually worked.

Avalanche Method: Mathematically Ideal

This one made the most sense for me. Pay off the highest interest debt first – regardless of balance. It will save money on interest over time.

How it works:

  1. Pay the minimum on everything.
  2. Put any extra toward the debt with the highest interest rate.
  3. When that’s gone, roll that amount into the next-highest interest debt.

Best if you’re motivated by numbers and long-term savings. Not so great if you need fast wins to keep up momentum.

Example scenario:

  • Credit Card: $3,000 balance at 22% APR, $90 minimum payment
  • Car Loan: $10,000 balance at 6% APR, $300 minimum payment
  • Student Loan: $15,000 balance at 4.5% APR, $180 minimum payment

With the avalanche method, you’d focus on Credit Card, then the car loan, and finally the student loan.

Tools to help: Undebt.it and Unbury.me offer free calculators that can show you how the avalanche method would work with your specific debts.

The Debt Snowball Method: Psychologically Powerful

Made popular by financial expert Dave Ramsey, the debt snowball method focuses on paying off debts from smallest balance to largest, regardless of interest rate. This approach is popular for a reason. It ignores interest rates and focuses on balance size.

How it works:

  1. Minimums on everything
  2. Throw extra money at the smallest balance.
  3. Roll that payment into the next-smallest balance.

It’s not mathematically optimal, but seeing progress fast can feel amazing—and keep you going.

Research backing: A 2016 study in the Journal of Consumer Research found that people who used the snowball method were more likely to successfully eliminate their debt than those who focused on high-interest debt first, primarily due to the motivational effect of achieving small wins.

Try: Ramsey Solutions’ Debt Snowball Calculator. IMO skip the lectures.

Hybrid: The Bee’s Knees?

Start with a small win (snowball), then switch to the highest interest (avalanche). It’s a mix of psychology and practicality.

This worked well for me when I felt stuck—sometimes a little buzz of progress is worth more than theoretical savings.

Should you Consolidate

Maybe. But be careful. I looked into consolidating my student loans and realized I’d lose some protections (like deferred interest on subsidized loans). Not worth it. It’s also worth mentioning if you have a lot of debt putting it all together may make interest compound at a faster rate, again, not good.

But if you’re juggling high-interest credit cards? A solid consolidation loan might help.

Good Options:

If you go this route, make sure the rate is actually lower and that you don’t rack up new debt after consolidating.

Balance Transfer Cards

How it works: Transfer high-interest credit card balances to a new card with a low or 0% introductory APR period.

Best for: These can work if you’re organized and can pay it off during the promo period. Otherwise, the interest hits hard, and you’re likely no better off.

Top options for 2025:

Avoid this option if you tend to forget due dates or carry balances long-term.

Creating Your Personalized Debt Payoff Plan

Now that you understand the various strategies, it’s time to create a personalized plan that fits your financial situation and personality.

Step 1: Choose Your Primary Strategy

Based on your debt inventory and personal preferences, select your main approach:

  • Avalanche for maximum interest savings
  • Snowball for psychological momentum
  • Consolidation for simplification and potentially lower rates
  • Professional help if you’re struggling to make payments

Step 2: Find Extra Money for Debt Repayment

The more you can put toward debt, the faster you’ll become debt-free. Consider these sources of extra funds:

Reduce expenses:

  • Cut subscription services you rarely use
  • Lower your food budget by meal planning
  • Reduce entertainment expenses temporarily
  • Negotiate bills like insurance, phone, and internet

Increase income:

  • Ask for a raise or promotion
  • Take on a side hustle
  • Sell items you no longer need

Use windfalls wisely:

  • Tax refunds
  • Work bonuses
  • Cash gifts

Step 3: Set Up a System for Success

Create a system that makes it easy to stick to your plan:

  • Automate minimum payments to avoid late fees and credit score damage
  • Schedule extra payments right after payday before you can spend the money
  • Track your progress visually with a debt thermometer or chart
  • Celebrate milestones in affordable ways to stay motivated

Step 4: Protect Against Setbacks

Build safeguards into your plan to handle life’s inevitable curveballs:

  • Maintain a small emergency fund while paying off debt.
  • Have a plan for handling unexpected expenses, that doesn’t require using credit.
  • Identify expenses you could cut quickly if your income drops

Tools for Your Debt Payoff

The right tools can make debt repayment easier and more effective. Here are some top options for 2025:

Debt Tracking and Planning

Credit Monitoring

  • Credit Karma : Free credit score monitoring and debt tracking
  • Credit Sesame : Free credit monitoring with debt management tools
  • Experian: Credit monitoring with FICO score access

Budgeting and Expense Tracking

  • Mint: Free budgeting app with debt tracking features
  • Personal Capital : Financial dashboard with debt tracking and retirement planning
  • EveryDollar : Budgeting app aligned with the debt snowball method

Maintaining Financial Health After Debt

Becoming debt-free is a significant achievement. It’s psychology, circumstance, and consistent daily effort. It took me years to pay down what I owed to the point I wasn’t anxious about it.

Having a good strategy and developing the discipline to stick with it ultimately allowed me to pay off what I owed. You can too. Once choice, one payment, one breath of fresh air at a time.

If you’re not sure what to do once you grow beyond deby, check out my guide on Investing for Beginners

It’s time to plant something better.

~Melon

Affiliate Disclosure: Some links in this article are affiliate links, which means I may earn a small commission at no extra cost to you. I only recommend products I trust and believe will help you on your financial journey.

The key is taking action—even imperfect action—rather than waiting for the perfect moment that never comes.