How to Delete Your Debt

Rid yourself of debt to improve your overall financial picture.

Rid yourself of debt to improve your overall financial picture.

Getting rid of your debt puts you in command of your finances. The ripple effect of deleting debt is tremendous; it improves your credit score, giving you access to lower interest rates, making financing a home or buying a new car less expensive. It also relieves your monthly burden, enabling savings toward a new baby or other life-changing event. Deleting your debt starts with knowing where you stand with your debtors and deciding what approach is manageable for you.

List every debt you owe, from student loans to credit cards to car payments. Use a spreadsheet format to list the basics of each debt -- the amount owed, interest rate and minimum payment.

Maximize how much budget you put toward debt on a monthly basis. Don't simply add together the minimum payments of your loans. Look at your overall spending and identify where you can cut back to put the most toward your debt reduction.

Set a course. Either pay down the highest-interest debt first to minimize interest, or pay down the smallest debt first to give you the mental support to stay on track with debt reduction. Pay at least the minimums on every other debt.

Be consistent with your budget. The key to reducing debt is not only identifying what you need to do but also following through. Once your first debt is paid off, use the amount paid toward that debt toward the next debt on your list.

Avoid any additional debt. While on a debt diet, you can't buy more things on credit. Use cash or your debit card to get into the habit of using only your available funds to buy, getting out of the habit of slapping down a credit card for a future payment.


  • Consider refinancing debt to take advantage of lower interest rates. For example, you may be able to consolidate all of your credit card debt to one card with a low rate by doing a balance transfer.
  • Dedicate any extra money you receive, such as a bonus or raise at work, to your debt payments until your debts are paid off.

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About the Author

Carolyn Williams began writing and editing professionally over 20 years ago. Her work appears on various websites. An avid traveler, swimmer and golf enthusiast, Williams has a Bachelor of Arts in English from Mills College and a Master of Business Administration from St. Mary's College of California.

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