Handle My Debt Myself


Make a Plan and Stick to It

The Bottom Line: If you want to get rid of your debt, then combine a well thought out plan with self-discipline. “Snowball” and “avalanche” are two popular do-it-yourself (DIY) ways to pay off debt faster.  The basic idea is to avoid minimum payments and set a fixed amount of money each month to pay off your debt. Some people recommend paying off the higher interest debt first, while others recommend making smaller balance debt a top priority. EIther way, discipline is the key to handling your debt by yourself.

Are you confused about the best way to tackle your debt? Unsure if you can do it on your own or if you need professional assistance?

Sorting out different types of debt and determining the proper way to handle them is confusing. It’s important to go about things in the right order. You need a clear understanding of your financial situation, or it is nearly impossible to come up with the best debt reduction plan.

In order to make a DIY debt plan work, you need to stay motivated. One trick is to set aside a prize for each goal that you accomplish. Paying off debt is not a sprint, so stagger your goals and make them achievable.

Some people need the help of a professional to create a budget, set financial goals and track their progress. However, if you are up to the task, then dig in and get started.

In order to successfully create and implement a plan to handle debt by yourself, follow these steps:

  1. Make a list of your debts
  2. Figure how much you can afford each month
  3. Create debt-pay off goals
  4. Implement a strategy
  5. Stick to your plan and track your progress

Step 1: Get a Handle on Your Debt

The first step to paying off your debt by yourself is to make a list of all your debts.

Start by creating a table that lists all of your debt. Include the following elements:

  • Type of debt: mortgage, auto, student, personal, credit card, other
  • Balance
  • Interest rate
  • Monthly payment
  • Notes

Monthly payments for an installment loan (mortgage, auto loan, and personal loan) are generally fixed. If there is a variable interest rate, then mark that down in the notes, along with when the change is scheduled to take place and what the new payment would be in the worst-case. Monthly payments on a revolving credit line such as a credit cards, however, don’t have fixed payments, or fixed balances. Mark down the current minimum payment. In the note section, write down how much you are allocating to pay down the debt and if you are planning to increase your credit utilization.

Step 2: Get a Handle on Your Cash Flow

In order to handle your debt, you will need to know your cash flow. This includes both your expenses and your income. Keeping and maintaining a personal budget allows you to understand and control your finances.

Just as debt is not static, neither is your monthly cash flow. Many people have overtime pay, bonuses, seasonal work, or pick up extra jobs. In addition, certain investments and savings might become available over the course of the year.

By understanding your budget, you can allocate money to your expenses, savings, and a minimum amount of money toward paying off your debt.

Step 3: Set Your Debt Goals

The next step to take is to set financial goals.

Start by setting general financial goals. Here are a few examples:

  1. Improve your cash flow by lowering expenses, increasing income, and getting rid of debt.
  2. Improve your net worth by paying off debt (or getting less expensive loans/credit) and increasing your savings and investments.
  3. Improve your credit by monitoring your credit report, disputing inaccurate items, and paying your bills on time.

Make your goals as specific as possible. Include a timeline, total cost, monthly payments, action plan and level of importance.

An example of a specific debt related goal is to pay off your credit card within three years by making larger monthly payments.

Step 4: Set Your Debt Reduction Strategy

Paying off debt quicker will save you money. However, make sure that paying off debt fits into your overall financial strategy, including creating savings and retirement accounts.

The most popular programs to reduce debt are to make accelerated payments. In general, credit cards have the highest interest rates, so it is most beneficial to pay them off first. If you can negotiate better rates, then you can save money. However, focus your payoff strategy on the amount of money you pay each month.

There are two methods to handle your credit card debt, both of which start with the assumption that your overall credit card payments are larger than your total minimum payments. The excess amount is applied using one of these methods:

  1. Snowball: Many experts suggest that you add the extra money to the smallest balances. The biggest advantage to this system is the psychological push you get by crossing off a debt. The satisfaction pushes you to continue with the plan.
  2. Avalanche: The second method is to add the excess amounts to the credit card with the highest interest rate. The great advantage to this system is that you pay the least-overall interest.


Here is an example of how much money a consumer can save through a DIY debt reduction plan:   

Current Situation: Owe $22,500 in credit card debt. Your monthly payment options are to make minimum payments, maintain the current payment on your credit cards ($675 in the example) or make a larger payment. The table shows your minimum payments for each credit card and the order to you would pay them off based on the different methods.



Interest Rate

Minimum Payment (3% but never less than $20)

Payoff Order Snowball Method

Payoff Order Avalanche Method
































The chart below shows the differences in total interest and payoff time. Just by maintaining a fixed payment you will reduce your total payments by 62% and the payoff time by more than 22 years. By adding extra money each month, you can get even greater savings. Although the avalanche method brings the best results, choose the method that has the biggest chance of success for your personality.

Payoff Method

Monthly Payment

Total Interest

Total Time


$675  and declines (never less than $20 for each card)



Fixed Payment












Step 5: Stick to Your DIY Plan

Perhaps the hardest part of paying off debt is sticking to a plan. One way to make sure that your plan is working is to track your finances, including:

  • Maintain your budget
  • Update your progress on reaching your goals
  • Track your debt payments

Life certainly isn’t static. Higher expenses, unexpected bills, or a loss of income, are all good reasons to update your plans. If you feel overwhelmed by your debt situation, then take advantage of the professional help that is available.