Debt Reduction Strategies


Debt reduction strategies are an important part of any plan to get out of debt.

Debt reduction strategies are an important part of any plan to get out of debt.  First, you have to be resolute in your decision to reduce your debt.  You have to give it 100% of your effort at first and pretty soon using these debt reduction strategies will become a way of life!

Debt Reduction Strategies : Plan Your Attack

Once you have decided to tackle that debt once and for all, you will need to assess the situation.  Get out all your credit card bills.  Make a list of the balances and the interest rates.  These 2 amounts are used in each of the methods below.  Having a copy of your credit report can help you pay off small bills that you might not know about and catch any mistakes, but it’s not necessary. Planning your actions will help your debt reduction strategies become efficient and effective.

Choose your Debt Reduction Method

Randomly throwing money at debts might not get you the fast results you’re looking for.  If you want to erase that debt, here are 2 methods that most experts recommend.

The Debt Snowball Method

The basic principle behind this method involves paying your lowest balances off first.  Seeing debts dwindle before your eyes gives you the motivation to keep paying those debts off.  This method takes advantage of the psychological effects of your feeling of accomplishment.  Paying off the debt becomes like a challenge to you, and winning by paying as much money towards the debt becomes a feeling you crave!


This method involves paying your lowest balances off first

This method is driven by the balance amounts regardless of interest rates.

The Debt Avalanche Method

This method of paying off debt is referred to as the correct way to pay down debt.  This involves making higher payments on the higher interest rate cards to pay them off faster; therefore you pay less interest.  Yes, this method does make more technical sense.  Paying less money to finance your debt makes sense, but this method does not give you the small victories along the way.  Many people need those to continue the motivation and see that scraping together and putting every extra penny towards this debt is yielding results.


This method of paying off debt is referred to as the correct way to pay down debt.

To use this method, gather all of your bills and list them according to interest rate—highest first.  Keep paying the minimum payments on all the cards, but pay as much as you can toward the highest interest rate first.  Once it’s paid, move on to the next one and so on.

This method is driven by the interest rates regardless of balances.

Whichever debt reduction strategy you choose, it’s better than what you are doing now!  These methods do share one very important concept:  focus on one card at a time.  It is way smarter to have a plan for attacking your debt in a methodical manner than going at it wildly.

Putting Debt Reduction Strategies into Practice

OK, now that you’ve made a plan for getting out of debt you have to execute it.  Financial guru Dave Ramsey says that getting out of debt is 20% head knowledge and 80% behavior.  So you can know everything about debt reduction strategies, but putting it into practice is most of the work!  Evaluate your spending habits; find places you can cut out a couple of dollars here and there.

  • Pack your lunch for work.





  • Wait for the new movie to come out on DVD





  • Hit the thrift shop





  • Shop the sales





  • Be creative!

There are hundreds of ways to trim your budget.  Remember, the more cash you can free up to put towards your debt the faster it goes down and the less interest you pay.  If you’ve reduced your spending as much as you can and you still don’t have enough to make a meaningful impact on your debt you can always pick up a side hustle.  Many people pick up small jobs on the side to make a couple hundred bucks a month.  You may not have to keep it for long; just long enough to get a foothold on your debt.

Putting every available dollar towards your debt will help modify the behavior that got you into debt in the first place.  You will learn to live a downsized life and you’ll not like the scrimping and spending every single dollar you get towards this debt that you ran up maybe not thinking paying it back would be this much work.  Bottom line?  Paying it back will be tough and you won’t want to do this to yourself again!

Learning about debt reduction strategies is the easy part—now it’s time to put your money where your debt is!

Speak Your Mind