woman in coffee shop working on how to reduce debt

Once you’ve outlined a clear plan of action, you’ll be able to reprioritize your finances and work to reduce debt.


Find the simplest system for paying down debt (and let it work its money magic).

Debt can feel like a messy home after a busy week: You’re intimidated to start decluttering, you don’t know which section to tackle first, and the entire process seems exhausting and even a little impossible. However, just as messy spaces are often conquered faster and more easily than you’d think they could be, it is possible to reduce debt, declutter your finances, and notice the results quickly.

Bonus: The long-term effects of healthy finances can help you save for a new car, pay off student loans, or save up for a big deposit on that dreamy San Francisco, CA, apartment for rent. Here are some tips to help you get started.

  1. 1. Take advantage of your free credit report

    Whether you’re fully aware of a few negative marks on your credit report or you’ve never seen a credit report in your life, now is the perfect time to get a grasp on your full credit picture. Luckily for you, it’s entirely free.

    Under the Fair Credit Reporting Act, each of the three major credit-reporting agencies (Equifax, Experian, and TransUnion) must give you one free copy of your credit report each year upon request. While the report doesn’t include your credit score, it does offer a snapshot of what potential lenders see when they determine your creditworthiness — delinquent accounts, bankruptcy filings, lines of credit, and payment history, among other things.

    Credit-reporting agencies often receive information from different sources, so reports may vary. Check each one thoroughly to ensure all information is complete and correct. If you have a dispute, follow the proper protocol to inform the credit-reporting agency or reporting company of your complaint. Seriously: Don’t skip this step. Unless the agencies deem your claim frivolous, they must investigate.

  2. 2. Eliminate sneaky, unnecessary expenses

    Have you signed up for a subscription you’ve long since stopped using but still pay for each month? Are you sitting on a ridiculously high cable bill with a hoard of channels you never watch? Our budgets can become bloated with expenses we’ve become accustomed to but wouldn’t notice if what they provided disappeared. Check your monthly spending for these invisible money drains and start cutting accordingly.

    Be sure to examine your other essential bills and start calling your providers — think cellphone, cable, and insurance — to see what they can do for you. If they are unwilling to budge, it may be time to jump ship. Don’t let yourself be tempted: If they push extra services instead of a drop in the bottom-line price, remember that while extras are nice, these features won’t give your budget the wiggle room you’re looking for.

  3. 3. Find ways to simplify your budget

    Between work, managing a household, and maintaining both professional and personal relationships, it can be easy to push financial management to the bottom of your to-do list. That’s why automation, with quick, routine check-ins, can be a lifesaver.

    Once you’ve eliminated all unnecessary expenses, your budgeting picture should be much clearer and you can set up auto-pay on certain bills. You may want to consider having a portion of your paycheck automatically deposited into your savings account on payday. From there, you can set every bill that does not vary by the month on auto-pay and set other bills to be paid on the first day of every month, regardless of due date.

What streamlined systems work best for you? Let us know how you simplified your finances and worked to reduce debt in the comments below!