3 Debt Payoff Strategies That Actually Work to Kill Debt for Good

The New Year is coming and with it, many people looking for debt payoff strategies that will help them conquer their debt once and for all. If this is your goal, you may have already noticed that there are many different debt payoff strategies out there, which can make it hard to choose the one that’s best for your situation.

Debt payoff strategies are important because in order to be truly successful, you have to have a plan. In fact, I’m an advocate of picking one New Years Resolution and sticking to it. You’re much more likely to succeed that way! Truly, there is no better resolution than vowing to eliminate your debt entirely.

Below are three debt payoff strategies that might work for you depending on the amount of debt you have, your determination, and whether or not you need accountability on your journey.

One debt payoff strategy is not necessarily better than the other. Really, it’s about creating a plan that really works for you so that you can finally achieve financial stability.

1. The Classic Snowball Method


The snowball method is the most common of the debt payoff strategies out there. However if you haven’t heard of it, here’s how it works:

  • List your debts smallest to largest.
  • Pay off your smallest debt first (not your highest interest rate debt.)
  • Once your smallest debt is paid off, roll that payment onto the next one until all are paid off.

The idea of rolling your payments to each larger debt is where the “snowball” imagery comes in. You have to think of a snowball rolling and getting bigger and bigger until all of your debt is completely gone.

While the snowball method is common, it really just matters that you start paying off debt. In fact, there are a number of things you need to do before you start paying off debt – like figuring out exactly how much you owe and starting an emergency fund.

Critics of the debt snowball strategy say that you’ll save more money by paying off debt with high interest rates first. If you want to focus on interest rates in your debt payoff strategy, the next idea might work better for you.

2. Consolidate and Destroy


One reason people can fall deeper into debt is because they get disorganized with their money. After all, a typical American household pays numerous bills every single month.

The average household carrying credit card debt has north of $15,000. Adding credit card payments, personal loan payments, car payments and more on top of that can get pretty stressful.

That’s why, when it comes to debt payoff strategies, I’m a fan of the consolidate and destroy approach. There are many different ways to consolidate your debt from using a balance transfer card to lower your interest rate to getting a personal loan to pay off your debt. (LightStream & Avant are both good options to consider for personal loans.)

Once you consolidate your debt to an interest rate that is much more manageable, start destroying it. When you know you’re truly knocking down your principal instead of sending tons of money in interest to your credit card companies, you’ll be much more motivated.

Are you looking for debt payoff strategies that really work? Here are 3 examples that can help you pay off your debt for good and achieve financial freedom.

3. Work With a Non-Profit to Create a Debt Management Plan


There are a lot of shady companies out there who claim they’ll help you eliminate your debt but really they’re just out to make a profit. There is a huge difference between debt settlement and debt management.

Debt settlement companies are typically for-profit. What you’re looking for is a non-profit debt management company (the biggest one is NFCC.) When you enroll in a debt management plan, you’ll work with a counselor who will help you to make a plan to pay off all your debt in 3-5 years.

This is an option for people who really can’t do it on their own or feel like they’d make better headway if they had an advocate on their side. You can see the full list of the differences between debt settlement and debt management here.

Ultimately, as long as you find a debt management company that is vetted, is a non-profit and has a solid track record, they can go a long way in helping you conquer your debt once and for all.

Of course, these are not the only debt payoff strategies out there. There are many methods you can use to kill your debt for good – here are 25 ways to start paying off debt that will give you a good start.

Whether or not they work really depends on your dedication, how much debt you have, and your willingness to succeed.


Have you paid off a significant amount of debt? What debt payoff strategies did you use to kill your debt? What is one thing you’ve done to stay out of debt for good?

The post 3 Debt Payoff Strategies That Actually Work to Kill Debt for Good appeared first on Frugal Rules.

Source: Frugal Rules