If you’re carrying debt and feel stuck, I want you to know: you’re not alone. Across the world, debt is one of the most common reasons people feel stress about money — even when they have a job and steady income. According to the International Monetary Fund, total global debt (public + private) reached $251 trillion in 2024 and remains just above 235% of global GDP. IMF+1
That’s a big number. But here’s the hopeful truth: debt isn’t a life sentence. With clarity, kindness toward yourself, and a clear plan, you can move toward freedom. Let’s walk through how.
1. Understand What Kind of Debt You Have
First, take a deep breath and look clearly. Not all debt is created equal. Some is useful (like low-interest debt to build a business or education), some is costly (high-interest credit cards, payday loans), and some is hidden. Globally, households in many countries still struggle because they don’t realize the cost of debt until it’s too late.
Write down all your debts: lender, interest rate, minimum payment, and balance. Seeing it all helps reduce fear. It also helps you choose which debts to pay first.
2. Choose Your Strategy: Snowball vs AvalancheYou have two proven paths:
- Snowball method: Pay off your smallest debt first to create momentum.
- Avalanche method: Pay off your highest interest-rate debt first to save money.
Both work. Which should you pick? Choose the one you’ll stick with. A global survey from the Organisation for Economic Co‑operation and Development (OECD) suggests that “winning financially” is less about perfect strategy and more about consistency. So if the snowball method motivates you, go with it.
3. Build a Realistic Budget That Includes Debt Payments
Here’s where your foundational money work matters. We covered budgeting in Learn Money. Now apply it toward debt. Allocate a “minimum payment” line for each debt and an “extra payment” line if you can. Even small extra payments matter. One extra $50 per month can shave years off a loan.
Globally, many people live paycheck-to-paycheck and skip budgeting entirely. When you build even a rough budget, you create breathing room.
4. Create an “Emergency Buffer” Before You Attack Fully
It may feel contradictory to save when you’re in debt. But here’s the wise approach: build a small cushion (say, one week of living expenses) so that when something unexpected happens you don’t add more debt. The IMF data shows that private debt declined globally because many households realized they couldn’t absorb shocks. IMF
Once your buffer exists, redirect more of your cash toward debt repayment.
5. Beat Interest by Refinancing or Negotiating
Interest is the silent drain. If you live in a country where refinancing or consolidating is possible, explore it. Ask lenders for a lower interest rate or look for consolidation loans. Even in emerging markets, financial services are evolving, reducing rates can produce big relief.
6. Track Progress and Celebrate Milestones
Make paying off debt not just a grind but a journey. Create a visual tracker where you mark off paid-down balances, maybe every $100 or every loan closed. Celebrating small wins boosts your mindset and keeps you going.
Research shows that in regions where people see progress visually, they’re far more likely to remain motivated.
7. Shift Your Mindset From “Debt Shame” to “Debt Coach”
We often feel shame when we carry debt. But what if you looked at yourself as someone learning, growing, and becoming financially empowered? Change the internal dialogue. Say: “I’m a learner. I’m a builder.” This shift matters more than you think.
Debt doesn’t define you. What defines you is the clarity you bring to it and the action you take. Step by step, debt became your burden, step by step, you can reduce it. You don’t need to erase it overnight. Just choose your strategy, budget with intention, save a little for security, fight the interest, track progress, and shift your mindset.
At BetterMoney, we believe financial freedom starts with you , one decision at a time. Let’s walk this path together.
