Best ways to reduce debt
On Wall Street, I built businesses by managing leverage. Too much debt, unmanaged, destroys balance sheets — and the same is true for personal finance. With U.S. household debt hitting $17.5 trillion in 2023 (Federal Reserve), reducing debt is no longer optional; it’s survival. Here are the smartest ways to regain control.
1. Use the Debt Snowball Method
- Pay off smallest balances first for quick wins.
- Builds momentum and motivation.
- Households using this method clear debt 15–20% faster.
2. Try the Debt Avalanche Method
- Focus on highest-interest debt first (usually credit cards).
- Saves the most money long-term.
- Average U.S. credit card APR is 20.6%, making this a top priority.
3. Consolidate Debt
- Merge multiple loans into one lower-interest payment.
- Options: personal loans, balance transfer cards.
- Can cut interest rates from 20%+ down to 8–12%.
4. Cut Unnecessary Expenses
- Track spending with apps like Mint or YNAB.
- Redirect savings to debt repayment.
- Even trimming $200/month can free $2,400/year for debt payoff.
5. Increase Income with Side Hustles
- Freelance, tutoring, or online sales.
- Zapier reports 40% of Americans have side hustles, earning ~$810/month.
- Extra income accelerates debt repayment dramatically.
Final Word
On Wall Street, debt was a tool — but unmanaged, it sank firms. For individuals, the same rule applies: attack high-interest debt, create momentum, and free up capital. Every dollar not going to interest is a dollar compounding toward wealth.
