Debt Repayment Strategies And Pitfalls To Watch Out For

Debt Repayment Strategies And Pitfalls To Watch Out For


April 10, 2025 | Penelope Singh

Debt Repayment Strategies And Pitfalls To Watch Out For


Anyone looking at building a better financial future for themselves has to sooner or later wrestle with the issue of debt. A lot of people out there struggle with debt. Even seemingly well-off people with high paying jobs are in debt up to their eyeballs and hounded by collection agencies. Let’s review some simple strategies to minimize and quickly repay debt.

Make A Repayment Plan

If you’ve got a mountain of unpaid debts staring you in the face, it probably took some time to accumulate. You’re not going to be able to pay it off in one fell swoop. Sit down and total up your income, setting aside a reasonable amount that you can pay each week. If you set a total for your weekly payment, that balance on your credit card statement will go down steadily. A zero-based budgeting approach would be effective for this.

a pile of money sitting on top of a wooden floorrc.xyz NFT gallery, Unsplash

Advertisement

Keep Trying To Save

Just because you’re trying like mad to pay off your outstanding debts, that doesn’t mean you can’t put a little bit each month into a high-interest savings account or retirement fund. Saving money should be one of your ongoing financial goals while you pay off your obligations. Again, careful budgeting is the key. You can set a routine amount to contribute every payday and adjust the total as needed.

Don’t Forget The Avalanche Method

If you’re getting buried by debt, dig yourself out with the avalanche method. Simply put, this means paying off your highest-interest debts first. For most people this is usually credit card debt, which feature rates of 18% or higher. With rates like that, there are few things worse than piling up credit card debt since it’s so hard to get out from under it. Concentrate on paying off those debts first.

TheDigitalArtistTheDigitalArtist, Pixabay

Advertisement

Don’t Underestimate The Side-Effects

Remember that debt isn’t just numbers on a piece of paper or computer screen. Letting debt get out of control will lead to stress, anxiety, sleepless nights, and all the add-on physical health effects that come with that. Do yourself a favor and tackle the problem head on. If a bill arrives, try to pay it as soon as possible, but also try to find realistic ways to lower your utility bills. Being as proactive as you can will give you a sense of control over your own situation.

Stop Using Your Credit Card

Honestly, you’d think that a piece of advice like this would be common sense, but trust us, we hear the same horror stories over and over again. People who should know better are trapped under a truckload of unpaid credit card debt because they underestimated how fast the bill piles up, or they just kept putting off repayment further and further into the future. We repeat: if you’ve got credit card debt, stop paying for stuff with your credit card!

person holding black android smartphoneCardMapr.nl, Unsplash

Debt Consolidation

If you’re really in a deep pit of debt, e.g., student loans or medical bills, and you have life difficulties that are straining your ability to pay it back quickly, consider consolidation. In this case an agency offers you a loan at a lower interest rate than what you’re paying so you can pay off all your existing debts. Shop carefully for these debt consolidation companies, as the industry is well known for having its fair share of unscrupulous operators.

Keep Your Spirits Up

Years of low interest rates and a poor job market have combined to make the average person more indebted than ever before. While debt has become normalized for many, no responsible person should be comfortable going through life owing huge amounts of money. Implementing the basic strategies above will put you on a path to being debt-free, and may just restore your sanity in the process! 

You May Also Like:

Wasteful Expenses Are Keeping You Poor, According To Warren Buffet

40 Ways To Lower Your Living Expenses In 2025

Top 10 Things People Waste Their Money On

Sources: 1, 2, 3


READ MORE

My mom uses my social security number for credit cards. I’m 23 and can’t qualify for anything. Help?

Finding out that your own parent used your identity to open credit cards can be devastating. It’s a betrayal of trust—but more than that, it can leave your credit, your future, and your sense of security in ruins. If you’re in this situation, here are the steps you need to take—each one critical to reclaiming your identity and your financial freedom.
July 21, 2025 J. Clarke
The Essential Buffett Blueprint: 18 Wealth-Building Rules

Warren Buffet Created These 18 Rules To Keep Your Wealth

It’s not just about making money. Buffett mastered how to keep it, grow it, and give it meaning over time. His practical, no-fluff rules show what steady, thoughtful financial wisdom truly looks like.
July 16, 2025 Marlon Wright
Mohammed Bin Rashid Al Maktoum

The Wealthiest Royal Families Remaining In The World Today

Castles still stand, but billion-dollar holdings now tell the real story. Royal families control key resources and shape global investments. The lineup starts with more modest holdings and moves to powerhouses that shape entire economies.
July 16, 2025 Peter Kinney

I listened to a finance guru on TV and bought stocks that just bottomed out. I've lost everything. How do I rebuild?

While investing is a key part of retirement savings, we understand it can come with a degree of risk. Whether you're investing via dollar-cost averaging over a long period, or have chucked a bunch of money into the stock market from a severance pay, inheritance, or divorce settlement, don't get caught up in the "financial gurus" who preach buying single stocks. Here's what to do if you've overinvested and lost it all.
July 16, 2025 Jack Hawkins
Man making decision

My retirement fund is $700K, but I still owe $120K on my mortgage. Should I pay it off?

Should you pay off your mortgage before retiring? Let’s break it down in a super simple way so you can make the best choice without stress.
July 16, 2025 Allison Robertson

Social Security Facts That Seniors Should Know About In 2025

Social Security was meant to offer peace of mind. In reality, it’s a patchwork of advantages, oversights, exemptions, and fine print. Most don’t learn the rules until they’ve lost money or their precious time.
July 15, 2025 Peter Kinney


Disclaimer

The information on MoneyMade.com is intended to support financial literacy and should not be considered tax or legal advice. It is not meant to serve as a forecast, research report, or investment recommendation, nor should it be taken as an offer or solicitation to buy or sell any securities or adopt any particular investment strategy. All financial, tax, and legal decisions should be made with the help of a qualified professional. We do not guarantee the accuracy, timeliness, or outcomes associated with the use of this content.





Dear reader,


It’s true what they say: money makes the world go round. In order to succeed in this life, you need to have a good grasp of key financial concepts. That’s where Moneymade comes in. Our mission is to provide you with the best financial advice and information to help you navigate this ever-changing world. Sometimes, generating wealth just requires common sense. Don’t max out your credit card if you can’t afford the interest payments. Don’t overspend on Christmas shopping. When ordering gifts on Amazon, make sure you factor in taxes and shipping costs. If you need a new car, consider a model that’s easy to repair instead of an expensive BMW or Mercedes. Sometimes you dream vacation to Hawaii or the Bahamas just isn’t in the budget, but there may be more affordable all-inclusive hotels if you know where to look.


Looking for a new home? Make sure you get a mortgage rate that works for you. That means understanding the difference between fixed and variable interest rates. Whether you’re looking to learn how to make money, save money, or invest your money, our well-researched and insightful content will set you on the path to financial success. Passionate about mortgage rates, real estate, investing, saving, or anything money-related? Looking to learn how to generate wealth? Improve your life today with Moneymade. If you have any feedback for the MoneyMade team, please reach out to [email protected]. Thanks for your help!


Warmest regards,

The Moneymade team