How to Break Free from Debt
Debt has a way of sneaking up on you.
It might start small, like spending a bit too much on a credit card, or a loan you thought you’d pay off quickly. But then life happens. Your washing machine breaks, your car decides to stop, and before long, the debts are higher than your weekly laundry pile.
Fortunately, you can break out of the cycle with a clear plan and the right mindset.
Confront your numbers
Facing up to the amount you owe is the first step to being free from debt.
Start by finding a quiet spot, grabbing a strong coffee, and writing down every debt you owe. Credit cards, overdrafts, personal loans, even the money you borrowed from a family member.
Include that exact amount you borrowed, the interest rates, and the minimum monthly payments. Seeing the facts clearly laid out in front of you gives you the confidence to take the next step.
Which debt should you tackle first?
Progress comes quickest when you focus on one target at a time. Choose the method that fits your temperament:
The snowball method: Paying off your smallest debt first quickly builds your confidence. Once you knock it off your list, you can easily roll on to the next one.
The avalanche method: Start with the debt with the highest interest rate. You’ll save more money over the long-term as you pay down the fastest increasing costs first.
Both can work depending on whether you prefer quick wins or lower costs, so choose the one that keeps you motivated.
Create a doable repayment plan
Start with setting up a monthly repayment plan that you can handle. Don’t create one that looks great on paper, but leaves you scratching your head, wondering how you’ll pay the grocery bills at the end of the month.
A small and steady monthly payment plan is a lot more powerful than a big payment plan that you can’t stick to.
If your debt has an eye-watering interest rate, try contacting the lender and ask to freeze interest or consolidate the debt at a lower rate. It never hurts to ask.
Make small changes
Getting out of the debt cycle isn’t only about repaying your old loans, it’s also about protecting yourself from jumping back in. That means understanding your spending, potentially increasing your income and creating small, sustainable changes that can work for your lifestyle.
Begin by gaining a clear understanding of your financial situation. Write down exactly how much money is coming in and how much is going out.
When you know where your money is going, you can take charge rather than constantly wondering why your bank account empties faster than the treat cupboard on Shabbos afternoon.
Celebrate wins and take back control
There’s nothing quite like the feeling of paying off a debt. The first time you see a balance hit zero, it’s like a weight lifting off your shoulders. The more debts you clear, the lighter life begins to feel.
Don’t wait until you’re completely debt-free to acknowledge your progress. Every step forward counts. Mark the milestones in small, meaningful ways like a smiley note on the fridge or a quiet l’chaim at home. These little moments remind you that you are moving in the right direction.
At Mesila, we see time and again, how families who once felt trapped begin to rebuild their confidence once they take control. Debt-free living is the quiet satisfaction of knowing you’re back in charge.