Financial

Tidy Up Your Finances with a Debt Payoff Plan

May 29, 2025 //

Lighthouse Credit Union

If you’ve been feeling weighed down by credit cards, student loans, or other types of debt, you’re not alone. Many people struggle with managing debt, but the good news is that there’s a path forward. Creating a debt payoff plan is one of the most effective ways to reduce financial stress, get out of debt, and start working toward long-term financial freedom. Whether you’re aiming to pay off debt fast or chip away at it steadily, the right strategy can make all the difference.

Understand Where You Stand

Before choosing a debt payoff method, it’s important to get a full picture of what you owe. Make a list of all your outstanding balances, interest rates, and minimum payments. This quick exercise helps you prioritize which debts to tackle first, and which ones may be costing you the most in interest. You can also use our free financial calculators to estimate payoff timelines and interest savings.

Choose a Debt Payoff Strategy That Works for You

There are two popular methods for paying down debt:

Debt Snowball: Focus on paying off your smallest debt first, then roll that payment into the next smallest, creating momentum.
Debt Avalanche: Pay off the debt with the highest interest rate first to save money over time.

No matter which strategy you choose, having a clear debt payoff plan helps you stay motivated and manage debt more effectively.

Consider Consolidating Debt

Consolidating multiple balances into one loan or credit line with a lower interest rate can simplify repayment, reduce stress, and provide real debt relief. Lighthouse Credit Union offers debt consolidation options designed to help you streamline your debt and save money.

Stick to a Budget

It’s easier to pay off debt when you know where your money is going. A monthly budget allows you to identify spending leaks and redirect those funds toward debt payments. Even small changes, like cooking at home or canceling unused subscriptions, can help you pay down debt faster and move closer to eliminating debt entirely. Take this interactive, free course to learn how to build an effective budget.