When suffocated by debt, every moment can feel like torment. So much so that, like depression, the thought of trying to do anything to help yourself seems out of reach. So nothing happens. Or you make payments but are so overwhelmed that you don’t do so efficiently.

But you don’t need to reinvent the wheel. To make headway on your debt and start living your best life, all you need is a plan and a willingness to stick to it. Here are eight varying approaches to a debt you should know.

Debt Snowball Method

A great way to pay off your debt and feel accomplished in the process is to practice the debt snowball method. Say you have five balances, ranging from $500 to $3,500. Pay the minimums on your four highest balances. The money you have left after paying for your other bills should then be allocated toward the balance with the lowest amount.

You might rack up more interest this way, depending on your interest rates, but you’ll quickly eliminate the small balances one by one, reducing your payments. The snowball strategy provides a sense of accomplishment and is an effective emotional tactic for debtors who’ve been struggling to motivate themselves by paying off their debt.

 To make headway on your debt and start living your best life, all you need is a plan and a willingness to stick to it. Here are eight varying approaches to a debt you should know.

 Debt Avalanche Method

To the contrary of the debt snowball method is the debt avalanche strategy, in which a debtor pays the minimum balances on every balance but their highest interest rate. They then pay more toward the higher interest balance to eliminate it faster. The debt avalanche method saves a lot of money on interest, but may take longer for a debtor to feel they’ve made “true progress.”

Debt Snowflake Method

The snowflake method is an offshoot of the snowball strategy, but instead of paying the lowest balance with remaining money in one swoop, the balance is paid throughout the month. This strategy is ideal for debtors who don’t get a regular, steady paycheck (i.e. freelancers) as it allows them to make the same progress on their debt, but without seizing all their cash flow at one time. The snowflake method should extend to any money you come across. Make some money at a garage sale? Sell old clothes at a thrift shop? Throw that money toward your debt.

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DIY Initiative

Before turning to third-party debt relief options, you might be able to negotiate with your creditors on your own. Know how much you owe with each specific debt balance and your income ability to pay it off. Then, start gathering documents that prove your financial position. Lastly, call your creditors (the more proactive you are, the better) and be transparent about your financial situation. Things you can ask for include:

  • A payment grace period.
  • Waived late fees.
  • Reduced interest rate.
  • Restructured monthly payment.

Perhaps the best part about taking the initiative upon yourself is that creditors will stop calling you and late payment mail will stop arriving, granted the creditor accepts the terms of your negotiation. The mental stress saved from this benefit alone makes picking up the phone more than worthwhile.

Debt Management

Aka credit counseling, debt management plans involve a non-profit credit agency that attempts to restructure payment plans with your creditor on your behalf, but only if your debt is deemed worthy through a financial review session with the counselor. Debt management plans restructure your debt to a more manageable monthly payment and might even come with a reduced interest rate.

Debt Consolidation

When you’re carrying multiple balances and can’t follow the snowball, avalanche, or snowflake method based on your income, a debt consolidation plan might help. Through working with a third-party company, you’ll get a new loan — ideally with a lower interest rate — to pay back all your balances at once. With one payment to manage, getting a hold of your debt could be more manageable. Keep in mind that debt consolidation doesn’t change what you owe; it simplifies what you have to track.

Make sure you do the math on the amount of the loan and its terms, though. If the consolidation loan amount is higher than what you’re currently paying or it’ll take you longer to pay back the consolidation loan than it will to keep making payments on your balances, you’re better off passing.

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Debt Settlement

When growing debt and an inadequate income clash, more severe debt relief strategies are needed. Enlisting in a debt settlement plan means entrusting a company to negotiate your debts down to a lump sum that you can afford to say. The percentage of debt that these companies can eliminate for you varies.

For example, a quick search for Freedom Debt relief reviews shows that many debtors have significantly reduced the amount owed by enlisting the company’s help. Debt settlement can be a rebirth for debtors on their last leg but impacts credit scores for at least four-to-five years.

Bankruptcy

If you have too much debt and no income, maybe not even enough to make lump-sum debt settlement offers, you’re a candidate for chapter 7 bankruptcy. Chapter 7 is a last-resort plan as it liquidates your assets and damages your credit score for up to a decade. If you have income and the potential to make regular payments, declaring chapter 13 will allow you to keep your possessions as long as you can keep pace with court-ordered payments for three-to-five years. Chapter 13 stays on credit reports for up to seven years. Both options aren’t cheap, though; court fees, attorney costs and enrollment in mandated personal management courses add up.

On Budgeting, and Final Thoughts

Budgets are the standard operating procedure for every debt strategy. But creating a budget and living a frugal lifestyle is only one half of the battle. An actual plan must be established to pay back the debt. Depending on your situation and how you’re coping with your debt, one of these strategies will make more sense the rest. All that matters is you start a plan today toward a new, financially-free life.