How to get out of debt, step by step
Getting out of debt isn't about willpower — it's about a clear plan you actually follow. Here are the steps that work, in order.
TL;DRIn short
List every debt, choose a method (snowball or avalanche), automate payments and track your progress weekly.
- List all debts: amount, interest and minimum payment.
- Choose a method: snowball (motivation) or avalanche (saves interest).
- Cut expenses and throw that money at your target debt.
- Track your net worth to see it improve month over month.
1. List all your debts
Write down each debt: who you owe, how much, the interest rate and the minimum payment. Without this honest snapshot you can't decide anything. In Neto you can log debts as negative balances and see them inside your net worth.
2. Choose your method: snowball or avalanche
Snowball: pay the smallest debt first for quick wins and motivation. Avalanche: attack the highest-interest debt first, which saves you the most money. Both work — pick the one that keeps you going.
3. Free up money by cutting expenses
Review last month's spending and find leaks (subscriptions, fees, impulse buys). That money is your ammunition: send all of it to your target debt while paying the minimums on the rest.
4. Automate and track your progress
Schedule payments so you never miss one, and review your progress weekly. Watching the debt shrink — and your net worth rise — is the best fuel to keep going.
Frequently asked questions
Snowball or avalanche?
Avalanche (highest interest first) saves you more money; snowball (smallest debt first) gives more motivation. If staying consistent is hard, start with the snowball.
Should I save while paying off debt?
Yes — a small emergency buffer stops you from going back into debt when something unexpected happens. After that, prioritize the highest-interest debt.
How does Neto help me get out of debt?
Neto gives you the full picture: log debts, spending and savings, and watch your net worth rise as you pay down. No bank connection required.
Related: the 50/30/20 rule, saving with irregular income, how to calculate net worth.