Crush the debt monster: 7 steps to fight your debt

By Gina Freeman

Reviewed by Jill Cornfield

Jun 27, 2024

Read time: 4 min

Young woman sitting at desk, smiling after  crushing her debt

Key takeaways:

  • No debt problem is bigger than your ability to solve it. 

  • Assess where you are and then plan your attack. 

  • Combining tactics can speed up the process.

Most of us consider debt a necessary evil. But unaffordable debt can feel a lot less necessary and a lot more evil. Don’t worry! There are many ways you can take action, and you never have to go it alone. 

Here are steps to help you choose among debt solutions and take down your problems like a superhero.

1. Get the facts

It’s hard to use a map if you don’t know where you are. So your first mission is to establish a starting point. Get out a pen and notebook, fire up your laptop, or use a debt paydown app.

  • List your debts, including their balances, interest rates, and payments.

  • Write down your monthly living expenses.

  • Tally your sources of income.

  • Catalog your financial assets, including checking and savings accounts, investment accounts, retirement accounts, business accounts, and money people owe you.  

Many people have expenses and income that aren’t the same month to month. You can average or estimate them. 

2. Assess the situation

Add your monthly debt payments to your living expenses and total them. Total your sources of after-tax (take-home) income. Do your expenses exceed your income? If so, how much greater are your expenses? 

Do you have savings you could use to reduce your debts? How much could you cut your budget? Is it possible to increase your income? By how much? 

3. Track your enemy

What’s making your debt unaffordable? Did you lose income? Have a financial hardship or emergency? Did your living expenses go up? Are impulse purchases the culprit? A shopping addiction? Is the problem temporary, like a job loss? Is it resolvable, like an overspending habit? Or is it permanent, like a disability?

You need to figure this out before proceeding—your long-term strategy depends on the root of the problem. 

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4. Choose your weapons

The weapons you choose to conquer your debt depend on the reason for your problem and the size of your problem. Here are some of the best debt solutions around. You can deploy them individually or in combination:

Here are four examples of solutions for different types of debt problems.

Consumer A has lots of debt and decent credit. However, she can barely afford her minimum payments and can’t pay down her balances. She should create a budget, spend less, refinance to a lower interest rate and payment, and accelerate her debt payoff with the debt snowball or debt avalanche method. 

Consumer B lost his job. He recently got a new, better one, but he’s behind on everything, can’t catch up on his payments, and his credit is trashed. He may be a good candidate for debt resolution. 

Consumer C has a spending addiction. He deals with stress by buying vintage sneakers or treating his buddies to expensive nights at the club. He purchases costly jewelry for his girlfriend and just charged a $5,000 getaway he can’t afford. He needs counseling fast—credit counseling and possibly therapy. He needs a budget, and possibly a debt management plan or debt resolution. 

Consumer D is in big trouble. She recently went through a divorce and a serious illness. This forced her to use credit cards for necessities like food and utilities. Now the balances are high, and she’s only back to work part-time. Debt resolution or bankruptcy may be her best options for overwhelming debt

5. Put on your cape (or call for backup)

Some debt solutions like credit counseling, a debt consolidation loan or a debt management plan require you to work with trained professionals. With budgeting, DIY methods, debt resolution, or bankruptcy, you can go it alone or bring in hired guns who can back you up with expertise and experience. You can also try using helpful debt paydown or budgeting apps.

The good news is that, except for bankruptcy, you can try to DIY and then switch to professional help if you crash and burn. But it can be pretty hard to recover from a botched bankruptcy.

6. Fight the battle

Whatever debt solution(s) you choose, this is where you break it down into a to-do list and work your way through. Don’t miss any deadlines or skip steps. For example, your list might include revising your budget to find an extra $100 a month for debt repayment. Then, applying for a debt consolidation loan to free up more money for debt repayment. And finally, get through the debt avalanche process until your debts are cleared. 

7. Enjoy your victory

When you’ve zeroed your last credit card balance, pat yourself on the back. Reward yourself (responsibly). And make whatever changes you need to head off future debt problems.

Gina Freeman - Author

Gina Freeman has been covering personal finance topics for over 20 years. She loves helping consumers understand tough topics and make confident decisions. Her professional history includes mortgage lending, credit scoring, taxes, and bankruptcy. Gina has a BS in financial management from the University of Nevada.

Jill Cornfield

Jill is a personal finance editor at Achieve. For more than 10 years, she has been writing and editing helpful content on everything that touches a person’s finances, from Medicare to retirement plan rollovers to creating a spending budget.

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