How to Start Your Debt Repayment Journey (Even with Multiple Debts)
Navigating debt can feel like being lost in a thick fog. It's overwhelming, stressful, and it's hard to know which way to go. If you’re juggling multiple debts and wondering how you’ll ever get to the other side, know this: you are not alone. This is a common position to be in, and the good news is, you've already taken the most important step—you're looking for a way forward.
Your journey to becoming debt-free doesn’t have to be a mystery. The key is to transform a stressful, emotional problem into a clear, **debt repayment plan**. A plan gives you power and a sense of control. This guide is your starting point, and with a couple of simple steps, you can lift the fog and see a clear path ahead.
Step 1: Your Financial Blueprint (The Budget)
Before you can start paying off debt, you need to know exactly how much money you have to work with. Think of a budget not as a cage that restricts your spending, but as a blueprint for your financial future. It’s a tool that shows you where your money is going and, more importantly, how much you have left over to put toward your debts. This leftover amount is what we call your "surplus."
Creating a budget can feel daunting, but it doesn't have to be. All you need to do is list your monthly income and your monthly expenses.
- Your Income is everything you earn: your salary, any freelance work, or other sources of money.
- Your Expenses are broken into two main categories: fixed bills (like rent, utilities, and debt minimum payments) and variable spending (like groceries, fuel, and entertainment).
The difference between your income and your expenses is your **surplus**. That surplus is your most powerful weapon in the fight against debt. Our budgeting tool can help you find that number in minutes.
Step 2: Choose Your Debt Repayment Strategy
Once you know your surplus, you need to decide how to use it. There are two popular methods that provide a clear strategy for paying off multiple debts. Neither is "better" than the other; they simply appeal to different mindsets.
The Debt Snowball Method
The snowball method is for the person who needs a motivational boost. You list your debts from the smallest balance to the largest. You then make the minimum payments on all your debts, but use all your surplus to pay off the debt with the smallest balance first. Once that's paid off, you take the money you were paying on that debt and add it to the minimum payment on the next smallest debt. The payments "snowball" as you go.
Why it works: This method gives you quick wins. That feeling of eliminating a debt completely provides a powerful burst of motivation. Each debt you pay off is like a small victory, and that feeling fuels you to keep going.
The Debt Avalanche Method
The avalanche method is for the numbers person. You list your debts from the highest interest rate to the lowest. You then use your surplus to pay off the debt with the highest interest rate first.
Why it works: This method saves you the most money over time. By attacking the most expensive debt first, you reduce the amount of interest you pay in the long run. It’s the most financially efficient way to get out of debt.
Your Journey Starts Now
The most powerful part of a plan is that it gives you clear, actionable steps. It’s the difference between "I need to pay off my debt" and "I need to put my £300 surplus toward my smallest credit card balance this month, and then next month, I’ll attack the next one."
Our website’s tools are designed to work together to give you this exact plan. The budget tool helps you find your surplus, and our snowball and avalanche calculators help you see exactly how your numbers will work for each method. You can plug in your debts and watch your timeline to a debt-free future appear right on the screen.
Debt is a heavy burden, but with a plan, you can begin to lift it. This is your chance to stop feeling overwhelmed and start feeling empowered. You’ve done the hard work of gathering your information—now it’s time to put it to use.