What Methods Can You Use to Clear Your Debts?

It is a time of unprecedented economic strife for the average family. Energy bills have increased by 54%, while inflation has increased greatly against stagnated wages. In times like these, it is harder than ever to address debt – but even with the difficulties imposed by the present economic circumstances, there are ways your household can clear overhanging debts and reach financial freedom again.

Why is it important to clear debts?

Debt can exact a heavy toll on a household, in a number of impactful ways. Persistent debt can prevent you from building your savings for big purchases such as a car or investing in property and can directly affect your saving for retirement and later life. If you have taken lines of credit to support a household on a low income, paying back those debts can become difficult – leading to an adverse effect on your credit score, which can prevent you from accessing mortgages and arranged overdrafts.

All of this is to say nothing of the emotional impact a debt can have. If you are already struggling to repay debts, they will naturally grow, increasing your financial burden and increasing stress as a result. Managing debt is an important task for both your household’s financial and mental wellbeing; here are some key ways you can manage your debt.

Prioritising debts

It might be tempting to keep some money aside each month while paying off debts; in the vast majority of cases, the interest rate on your debts will outpace the growth of any savings. As such, prioritising your debt – and specifically, the older, higher-interest debts you owe – is crucial.

Getting debt with high interest paid off early can lighten the financial load significantly. You can use a loan with a lower interest rate than your previous loan to pay it off, decreasing the amount you would be liable to pay over time. A new loan agreement will also give you more time to repay, enabling you to align your short-term finances with longer-term goals.


Firstly, you should endeavour to find out your exact financial situation. Draw up a budget for your household, comprising your total monthly income and total average outgoings. Include everything, from utilities and subscriptions the average cost of your weekly food shop. This will show you your net income for each month, and the amount of ‘savings’ money you have to immediately allocate to debt. Find ways to increase this, whether by reducing the amount you spend on luxuries or by temporarily cancelling optional monthly costs such as gym memberships.

Seeking Advice

Lastly, do not be afraid to seek out assistance with your situation. You are not alone in struggling with debts, and there is a wealth of resources available to you in order to help you, including books about getting out of debt, written by those who have been through a similar experience.

Friends and family may be able to pitch in with emotional or financial support, while Citizens Advice have a number of free tools and advice for you to utilise. There are also debt management charities that can help you consolidate and pay off your debt.