What Can I Do if I’m Drowning in Debt? Here Are 3 Easy Strategies

This post originally appeared on The Financially Independent Millennial and has been republished with permission. 

Are you drowning in debt and wonder what you can do? Here are three easy strategies you can do today to get started paying off your debt.

First, you need a budget to create a monthly surplus. Second, you need to know how much you owe. And last, putting it together, you need to use that monthly surplus to pay off your debt.

Are you in a far from an ideal financial situation? Do you feel like you’re always trying to catch up? If so, you’re not alone.

The average US household debt is $137,063, including mortgage debt, credit card debt, and other forms of debt. 

It’s no wonder that many families feel they’re drowning in credit card debt and debt in general. 

That doesn’t mean it has to stay that way, but it feels a bit like we’re all in the middle of a financial crisis, or at least we’ve all been trying to catch up, right?  

Achieving financial freedom isn’t easy. It takes work. But, once you start, it gets easier. To be sure, no matter how bad your debt situation may seem, three simple steps can be taken to help you get back on track. Then, perhaps you might no longer feel like you’re drowning in debt.  

Create a Budget and Break It down into Wants/Needs

First, you’ll need to know your monthly income. In case your monthly income varies, then take an average of the last six months, and adjust as needed.

Click here for a downloadable budget that you can fill in, courtesy of The Financially Independent Millennial.


Start by breaking down your expenses into wants and needs. Wants are things that are “nice to have.” For example, wants are things like: new clothes, spa treatments, eating (and drinking) out, etc.  


Needs are fixed expenses like rent/mortgage, food, insurance, car payments, credit card payments, other debt payments, etc.

Sort Your Debt by Interest Rate

Now that you have your wants/needs budget set up, we need to figure out all your debts. Most importantly, we need to determine the interest rate, and the amount owed (not the monthly payment, but the total amount owed).

In general, your mortgage will likely be your largest loan, and it’ll probably come with the lowest interest rate. By contrast, lines of credit, and credit cards will have smaller balances than a mortgage, but come at a higher interest rate.  

Work the Levers

Now that you’ve gotten a handle on what you owe, how much you earn, and what’s left over, perhaps you might still be feeling like you’re drowning in debt. Not to worry too much, now I’ll show you how to use the levers to your advantage so that you can pay it off fast.

Wondering what the levers are? Levers are the tools you have in your arsenal to pay off your debt, and one day, become financially independent.

Decrease Spending (Wants)

Decreasing spending is by far the easiest way to generate a monthly surplus. The monthly surplus can then get used to paying off debt. When you work to decrease spending, it might feel like you’re a little bit like a “fish out of water.” Sure, you might want to “keep up with the Jones’,” but I assure you, for at least a few months, no one will notice. Not that it even matters!


  • Cut out the restaurants, and learn to cook at home.
  • Enough of the $5 lattes – make them at home! 
  • Enough of the 2nd and 3rd car payments – and no, cars are NOT investments!
  • Stop spending on clothes, just for now.

Increase income

You might be concerned that for whatever reason, you can’t earn more money. Well, I’m here to say that you can always make more.

For example, Side hustles are a perfect way to (temporarily) increase your income. You can do odd jobs on sites like Fiverr, or drive for a ridesharing company. Or, perhaps you might deliver food. Whatever the side hustle is, it has to be short-lived. But, you can’t overwork yourself for a long time. Otherwise, you’ll never have time to enjoy yourself. So, aim to have a side hustle just for the amount of time you need to pay off your debts.

Another way to (temporarily) increase your income is to sell the stuff you don’t need. Yes, people will buy it! Just organize the things you haven’t used in over six months, and list it on craigslist or eBay. Then, use the money to pay off the debt directly.

As bad as debt may seem to some of us, taking the right steps can help us get rid of it, even if it’s only for a short time.

Putting It All Together

Once you have your budget set up, your debts all listed in order of interest rate, you can start to work on a plan to pay it off. At this point, you’ll need to focus on your monthly surplus. Your monthly surplus is the amount you’ll want to put toward your debts. But which debt? It depends. There are two methods of attacking debt.

Snowball Method

The snowball method for debt reduction offers quick wins but is not the fastest. With the snowball method, you organize your debts by amount owing, from highest to lowest. Generally, your mortgage will have the highest balance, while a credit card might have the lowest.

With the debt snowball method, you work to pay off the debt that has the SMALLEST balance off first. Sure, you continue to make your minimum payments to the rest of the creditors, but the debt that has the SMALLEST balance gets paid off first. Quickly, you’ll have your first win. Then, you work to do the same to your next debt.

Avalanche Method For Debt Reduction

The avalanche method happens to be my favorite way to reduce debt. Also, it’s mathematically the fastest way. However, some people prefer the snowball method as it gives you quicker “wins”. But, in the end, the avalanche method is the fastest.

Here is how the avalanche method works. Remember your list of debt and the interest? Well, you aim to pay off the debt with the HIGHEST interest rate first, using your monthly surplus. Loans with the highest interest rate often include credit cards and lines of credit.  

You just need to make the minimum payment on all the other debts and make jumbo payments on the debt with the highest interest rate using your monthly surplus. Easy! Once you’ve eliminated the debt with the highest interest rate, pat yourself on the back because you just discovered what you could do if you’re drowning in debt!

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