Reducing your stress by debt reduction means paying off more than the monthly interest payments on your credit cards. If all you are paying off is the interest, whilst never actually paying off the debt, then all you are effectively doing is continually giving the banks money for the rest of your life.

Stop giving the banks more money!

debt reduction

Reducing your stress via debt reduction means paying off more than your months interest payments.

Reducing your debt is a big step and when you are overloaded it can seem insurmountable. But you can do it. First, figure out what accounts you have and which ones to pay, what order to pay them in and how much you need to pay to work the debt down.

Get a copy of your credit file

It is a good idea to access a copy of your credit file. Then get copies of your statements from other institutions that aren’t listed on the credit report. Now, take out your pen and paper and write out each creditor, the amount you owe them, the monthly repayment and the interest rates on each account.

Now prioritise your debts, consider first which is your not so good debts i.e. debt not linked to an asset or investment. And which are your good debts e.g. your home. Another way is to list your debts from highest interest rate to lowest then start paying off the highest ones first. Alternatively you may want to pay off your smallest debts first to tick off a debt on your list and have a quicker win. Whatever method, choose the one that motivates you the most.

Figure out your discretionary income

An important element in making this plan is calculating how much you can put to paying off your debts. To figure this out you need to calculate your discretionary income. Meaning the money left over for spending after you met your financial obligations e.g. expenses including bills, food, transport etc. must include debt minimums here as they are an obligation.

What ever is left over is the amount you can allocate to paying down extra off your debt.

Complete your debt reduction plan

Now you know that figure you can complete your debt reduction plan. Pay the extra amount plus your monthly minimum every month until the debt has been repaid. Continue to make the minimum payments on the other debts to be sure of not increasing them with non payment fees. When you close the first debt account start on the second and include the minimum monthly payment from the first and add that to the payment amount.

Go over your plan regularly to see how far you’ve come as well as updating it when your financial situation changes. Encourage yourself and don’t be discouraged by setbacks, they happen. The key is to get back up immediately and get back on track to achieve your goal.


If you’re facing financial hardship we are here to talk about a solution. Call us on 1300 887 211 or Book a Free No Obligation Phone Consultation with our friendly team and we can discuss debt management solutions specially focused on your personal situation.