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How to dig your way out of debt

clock icon March 20, 2017
tag iconBorrowing Strategies Savings & Deposits Wealth Strategies

There are a million different reasons why you are in debt, but only one way to get yourself out of it.

It’s time to take back control of your finances, no matter how impossible that task might feel.

Step. 1

First and foremost, you must make a commitment to getting out of debt: you are your own worst enemy. If you can’t afford it, don’t buy it. And while a budget is an excellent idea, the key is making sure it is realistic. Remember, paying off a debt will take time and patience but it will be worth it.

Step. 2

The next step is to list all your debts, no matter how small. Write them down in a spreadsheet. From there, look at how much interest you are paying and be prepared to negotiate with your bank for a lower rate. Considering a 0% balance transfer is only a good idea if a) you aren’t going to be tempted to use the new card and b) you can pay the total amount off during the interest free period.

Step. 3

Now it’s time to pay down your debt. Before you get started, there are two main strategies to consider.


This strategy is for people who struggle to stay motivated and need small wins to stay focused. Make the minimum repayments on all your debts, except the smallest. This debt is where your attention lies. Pay as much off it as you can each month until it has been paid in full. Celebrate, and move on to the next debt. The sooner you pay off those smaller debts the sooner you will feel more in control of your finances.


The avalanche method is more about math than your feelings. If numbers motivate you, then this method is for you. Work out which debt has the highest interest and focus on paying that off first, even if it is the biggest debt. If you can stick to it, this method will save you money on interest in the long wrong.


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