Step 1: Know Exactly What You Owe
List every debt: creditor, balance, APR, minimum payment. Total it all. Most people underestimate their total debt by 20–30%. Facing the full number is uncomfortable — but essential.
Step 2: Choose Your Strategy
Debt Avalanche: Attack the highest APR debt first. Mathematically optimal — saves the most interest. Best for people who are motivated by data.
Debt Snowball: Attack the smallest balance first regardless of rate. Psychological wins keep you motivated. Best for people who need momentum to stay on track.
Our recommendation: If you have one card at 35% APR and several at 22%, start with the 35% — the math is too good to ignore. Otherwise, snowball works great for most people.
Step 3: Consolidate High-Rate Debt
If you have multiple high-APR accounts, a consolidation loan reduces your interest rate and simplifies repayment to one payment. At 16.9% APR vs. 24% average card APR on $20,000, you save $2,800+ in interest over 48 months.
Step 4: Find Extra Money
- ✓Cancel subscriptions not used in the last 3 months
- ✓Sell unused items (avg. household has $3,000–$7,000 in sellable items)
- ✓Take on gig work for 3–6 months to accelerate payoff
- ✓Redirect any raise, bonus, or tax refund entirely to debt
Step 5: Protect Yourself From Future Debt
- ✓Build a $1,000 starter emergency fund before aggressively paying debt
- ✓Once debt-free, build to 3–6 months expenses
- ✓Keep credit card utilization under 15%
- ✓Automate savings on payday — pay yourself first
Elena Vasquez, CFP®
Chief Lending Officer · Rise Up Lending