Having debt can put a lot of stress on not only your finances but also your overall wellbeing. Don’t feel whakamā though – you’re not alone! Debt such as loans and credit card debt (especially if it’s high interest) can be hard to manage on top of other rising costs. The longer you have debt, the more expensive it gets because the cost of borrowing money means more fees and interest.

We have put together some advice from the experts with the best strategies for paying off debt, and how to start. Start by calculating your debts and put together a plan about how to tackle them.

Where to start?

Start by working out how much debt you have and what sort of debt it is. List out your debts with the amount and the interest rate.

The debt calculator from Sorted can help you work out the total amount

Look at your budget – you want to understand your overall incomings and outgoings to see what money you can allocate to pay off debt. If you aren’t budgeting a small amount to pay towards it, then you are already on the back foot! If there is something you are paying for at the moment that could be cancelled or paused for a while (Netflix, Spotify, etc), then this money can be put towards paying down a debt.

If you don’t have a budget yet, check out our article on how to start one

Some common ‘debt paying’ strategies from Sorted:

The ‘debt snowball’, where you pay off the debt with the smallest balance first. Once that’s out of the way, you take your extra money and aim it at the next smallest balance and repeat. Paying off the smallest debts first gives you motivation and momentum, we all know that quick wins are satisfying!

Snowballing your debt isn’t always the cheapest or quickest way out of debt overall, but you may find it easier to build up momentum and make it to your end goal of being debt free.

The other option is a ‘debt avalanche’, where you pay off the debt with the highest-interest rate first. When you finish that, you move on to the debt with the second highest-interest rate, then the one after that.

The debt avalanche is the quickest way out of debt, mathematically speaking, since you are getting rid of the debt that is costing you the most. Once this is paid, you have more money to funnel towards your other debts. If you have some high balances or if you find paying off large loans daunting, consider ‘snowballing’ your debts instead.

Remember – for both above strategies although you are focusing on ‘one debt’ at a time, you still need to make sure you are paying any minimum amounts required on other loans as you don’t want to end up paying more fees or interest if you can help it.

Another option to get on top of your debt is debt consolidation, which means combining all your debts together and paying them off with one (typically) lower interest rate. This can be done by taking out a personal loan and transferring the balances of all your debts (credit cards, car loans, buy now pay later etc) into one loan.

Consolidating can save you some money and make it easier to keep on top of the repayments by consolidating it down to one payment, however there are some risks as you want to be careful you don’t end up back in more debt!

For example, if you are paying off a credit card or a buy now pay later (BNPL) debt, once you transfer those balances over to the debt consolidation loan, you will end up with available credit to use. So, once the balances have been transferred make sure to close the credit card (or if you need it for emergencies – reduce the limit) and close the BNPL accounts to avoid the temptation of purchasing more and ensure that you are sticking to your goal of becoming debt free.

For more information from Sorted visit website to read their guide to tackling debt.


Here are a couple of bonus tips we like.

  • Call up all of the providers you currently have debt with. Ask if they will drop your interest rate!
  • Make sure you remove the temptation to create more debt. Cut up your cards and delete your apps off your phone.


We hope these tips help to get you on track and ease some of the financial stress that comes with having debt. Having debt isn’t always bad and can be a helpful tool when used to borrow for study, a business, or property. It’s when we use it to help with some everyday expenses that it can start to get out of control, and we end up spending our future money now.

If you need to talk to someone about your situation you can reach out to Money Talks on 0800 345 123 for personalised help.

MoneyTalks – Free, budgeting help, debt help


The information contained in this document is intended for general guidance and information only and is not personalised to you. It does not take into account your particular financial situation or goals.

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