• laura-ann-moore

Top 3 ways to clear debt

Do you stare at the minus numbers in your bank account and feel overwhelmed by what step to take next?


Well know that you are not alone, and that no situation is un-figureoutable.


No matter the reason for having debt, there is a solution to help you clear it. There is nothing to be ashamed of and the sooner you can embark on your debt-clearing journey the better.


There are multiple ways you can clear debt, depending on your situation and who you are as a person, so lets take a look at the top 3 debt-clearing methods:


Snowball Method


If you need motivation to keep clearing your debt, then this is the method for you.

  1. Make a list of all your debts and the remaining balances

  2. List them in order of smallest balance to largest balance

  3. Pay the minimum repayments to each debt except the smallest one (set up automatic repayments)

  4. With the smallest debt, pay as much as you can possibly afford of this debt. Do this every month until this debt is cleared and you can cross it off the list.

  5. Once the smallest debt is cleared, you will have one less debt and you simply repeat the process

A great option if you have multiple debts across different cards and loans and struggle to keep on top of all the different minimum repayments. It is easier to see your progress and can keep you on track month by month.


It might take longer to fully become debt-free and might cost you more money in the long run if you are being charged interest on your debts, but this is far better than not tackling the problem at all.



Avalanche Method


If you want to clear your debt in the most cost-effective way, then this method would be best for you.

  1. Make a list of all your debts and the remaining balances

  2. List them in order of highest interest to the lowest interest (and if you have any that are 0% interest, then you can order these from 0% interest ending soonest to furthest away)

  3. Pay the minimum repayments to each debt except the debt with the highest interest (set up automatic repayments)

  4. With the highest interest debt, pay off every month as much as you can possibly afford. Do this until this debt is cleared and you can cross it off the list

  5. Once the debt with the highest interest is cleared, you repeat the process with remaining debts

This one might feel frustrating because the debt with the highest interest, might be your largest debt, meaning it will feel like it is taking longer to clear.


However in the long-run, it will save you money because overall you will pay less in interest charges.


Debt Consolidation


Another option is to consolidate your debt into one larger debt that you pay off as one payment every month.


You could consider taking out an interest-free loan or doing a 0% balance transfer. These are super easy to do online and some great deals can be found. but you would need to have a good credit rating to do this.


Be careful not to take out a loan or another debt that is going to cost you more, and make sure that this is a cheaper option for you.



Regardless of which route you choose to take, the best thing you can do is tackle it head-on and feel empowered by the fact that you are choosing to take control of your money.


Remember your net-worth is not your self-worth, so no matter what financial situation you may find yourself in right now, it is no reflection on you.


If you are overwhelmed by your current financial situation, and you are struggling to manage, please know that there is help. You can get in touch with StepChange, Citizens Advice Bureau Debt Management or Debt Support Trust. who can offer free personalised debt advice.

Blog post author: Laura Moore

Laura is a twenty-something Money Coach from London who'll help you smash all your financial goals whilst still having fun and living your best life! Follow Laura on Instagram Sign Up to the Newsletter



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