How to Break Free from the Debt Trap

Debt can feel like a heavy weight that keeps dragging you down. Whether you got into debt through lifestyle choices, business loans gone wrong, or inherited someone else’s financial mess—it’s never easy.

But the good news is, you can get out of it with the right plan and discipline. Let’s talk about some concrete steps to help you break free from the debt trap.

1. List All Your Debts in Detail

Start by facing the music. Open those apps, statements, or dusty envelopes and write everything down. List each debt with these details: the lender, total amount owed, interest rate, repayment amount, and due date.

Here’s a sample table to get you started:

• Personal Loan from Bank X: $15,000 | 18% Interest | $750 Monthly Repayment | Due: July 2025

• Credit Card Y: $8,000 | 24% Interest | $500 Rolling Repayment | No Fixed Due Date

• Online Loan: $5,000 | 30% Interest | $1,000 Monthly | Due: June 2025

This helps you understand the full picture—and prioritise effectively.

2. Choose the Right Repayment Strategy

There are two popular debt repayment strategies: the Avalanche and the Snowball.

• Avalanche Method: Focus on paying off the debt with the highest interest rate first while maintaining minimum payments on the rest. This approach saves money on interest in the long run but requires more discipline.

• Snowball Method: Focus on clearing the smallest debts first for a quick motivational boost. It’s emotionally rewarding and builds momentum—ideal if you’re feeling overwhelmed or need quick wins.

If you’re someone who thrives on motivation and visible progress, the Snowball method might be the perfect fit.

3. Create a Realistic Repayment Plan

Once you know your debts and chosen strategy, build a monthly repayment plan. Start with your monthly income, subtract your essentials (rent, groceries, utilities), and see how much is left for debt repayment.

Example:

• Monthly income: $10,000

• Living expenses: $4,000

• Leftover: $6,000

From that $6,000:

• Allocate $5,000 for debt repayments.

• Set aside $1,000 for a mini emergency fund—this stops you from needing new loans if unexpected costs pop up.

Important: Don’t take on new debt while you’re repaying current ones. Avoid paying one loan with another.

4. Use the 90-Day System to Stay on Track

Set a 90-day timeframe to monitor your progress. Create a simple tracker using a spreadsheet or an app to track how much you’ve paid and what’s left. Every week, check in with yourself or your partner about:

• How much debt you’ve cleared

• Any upcoming due dates

• Any unexpected changes in income or expenses

• Any small wins—celebrate those milestones!

If you're falling behind, look at areas where you can increase income: freelance work, selling unused items, or taking on a side gig.

Also, don’t be afraid to negotiate with lenders. Ask if they can lower your interest rate or extend your repayment period. Many lenders prefer a slow, steady repayment over defaults.

5. Stay Focused and Reward Yourself Along the Way

Debt repayment is often a marathon, not a sprint. Don’t compare your journey with others. Instead, focus on your own progress. If you’ve paid off a loan, celebrate that win! Have a low-cost treat or spend a relaxing weekend without financial worry.

Remember: being debt-free isn’t just about money. It’s about peace of mind, better sleep, stronger relationships, and freedom to plan your future.

Final Thoughts

Getting out of debt isn’t about finding a magic solution—it’s about being intentional, consistent, and realistic. Start with where you are, use a proven strategy, track your progress, and be kind to yourself during the process. You didn’t get into debt overnight, and you won’t get out overnight either. But with a plan in place and small consistent steps, financial freedom is 100% achievable.

If you’re currently feeling overwhelmed, take a deep breath and remember: you’re already making progress just by reading this. Now, let’s take that next step together.

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