Step 02 · Debt plan

Take control of debt

Debt becomes manageable when it stops being a vague pile. Map the balances, protect the essentials, and send extra money where it changes the result most.

A set of balance cards organized into a clear payoff plan — A written payoff plan turns a vague balance into a sequence of decisions.

Make one complete list

For each debt, record the balance, interest rate, required minimum payment, due date, and any promotional expiry. Keep every required payment current first; late fees and damage to credit are expensive distractions.

Choose a payoff method on purpose

The avalanche method directs extra money to the highest interest rate first and usually costs less. The snowball method starts with the smallest balance and can create momentum. Either can work when it is funded consistently; switching methods every month cannot.

Protect a small buffer

Before throwing every spare dollar at debt, keep a modest cash buffer for ordinary surprises. Without one, a tyre, copay, or repair may simply become new high-interest debt. Then automate the extra payment after payday.

Write the order before payday

Choose the target balance before extra money arrives. That removes the temptation to divide a small extra payment across every account and make no visible progress anywhere. Keep minimum payments current, then direct the planned extra amount to one target until the rule changes for a clear reason.

Example: With a $90 extra-payment budget, the avalanche method sends the full $90 to the highest-rate balance after minimums. The snowball method sends the $90 to the smallest balance. The useful choice is the one you understand, can explain, and can repeat next month.

Know when the plan needs outside help

If required payments do not fit your income, if a promotional rate is expiring, or if collection activity has started, do not solve it with a prettier spreadsheet. Contact creditors early and consider qualified, independent debt advice in your jurisdiction.