7 Smart Ways to Pay Off Debt in 2023

7 Ways to Pay Off Credit Card Debt Faster

Are you struggling to pay off one or more debts and want to regain control of your finances?

If so, then consider a debt repayment strategy. This is when you assess your finances, create a plan, and gradually pay off your debt(s), with as little impact on your lifestyle and wellbeing as possible.

Depending on your circumstances, you may also be able to reduce the total amount of your debt(s), which includes associated interest and fees.

Key takeaways


  • The key to reducing debts starts with an assessing your income and expenses to understand how much money is available for debt repayments
  • The snowball and avalanche methods are two ways to approach debt repayments – based on paying off the smallest debts first (snowball) or paying off the debts with the highest interest rates first (avalanche)
  • Debt consolidation is an effective way to combine multiple debts into one simple, easy
    to manage monthly repayment plan.
  • Everyone’s situation is different. Get in touch with the Debt Fix team for a free consultation and options best suited to your personal situation.


How to Pay Off Debt in 2023

Here are 7 smart ways to pay off debt in 2023 and beyond.


1. Assess Your Finances

Use a free budget calculator to assess your finances. This will help you determine how much money you have coming in and out, and how much you have left to pay off your debt(s).


Add up all your monthly income sources, such as your job, side hustles, Government payments (Centrelink), and passive income from investments and interest from savings accounts.


Then, add up all your monthly expenses, such as rent or mortgage, utility bills, groceries, transport, insurance, and subscription services. For recurring variable expenses, calculate the highest recent amounts, using them as a baseline for your budget.


From there, perform the following calculation to determine what you can afford in debt repayments:

Total monthly income – totally monthly expenses = Available for debt repayments


2. Choose Your Ideal Debt Repayment Method

The two most common ways to repay multiple debts is to take either the Avalanche or Snowball approach.



The snowball approach involves paying off debts with the smallest balances first. How does this work? Let’s say you have three debts valued at $250, $1,000, and $5,000. With the snowball approach you pay off the $250 first, followed by the $1,000 and $5,000 debt in that order.

Paying off the smallest balance debts first is a great way to break down the process into achievable milestones. But the downside is you could end up paying more interest, especially if the highest debts – the ones you pay off last – have the highest interest rates.



The avalanche approach involves paying off the debts with the highest interest rates first. While this means you could be waiting longer to wipe out each debt, if you don’t need those ‘minor victories’ to stay motivated, you will likely reduce the total amount of interest you pay.

Alternatively, you could take a hybrid approach, where you start with a low balance debt and then, once that is clear, transition to  moderate-to-high interest rate debt.


3. Credit Card Balance Transfer

If you have a high interest credit card, then you could transfer the balance of your credit card to a new card with a zero or low interest introductory period. Then, pay off as much of the credit card debt as you can before the introductory period ends. You can also do credit card debt consolidation by combining multiple debts into one.


If done right, you could pay considerably less interest than if you stayed on the same credit card. Just make sure you read the fine print, and that you know what the interest rate will be once the introductory period ends. Watch out for hidden fees like account setup and account management fees, too.


4. Consider a Debt Consolidation Plan

If you are having trouble juggling multiple debts at once, then consider a debt consolidation plan.

A debt consolidation plan is when you combine multiple debts into one monthly instalment payment plan. This means you only stay on top of one total debt amount, as opposed to paying multiple debts with different due dates per month.


And with the assistance of a debt consolidation expert, they can also negotiate with your debtors to potentially reduce the total amount of your debts, including associated interest and fees. In some cases, they may be able to eliminate interest and fee payments altogether. However, you may have to prove financial hardship to be eligible for such an arrangement.


Furthermore, if your circumstances change during your formal debt agreement period – for example, you lose your job – then let your debt consolidation expert know. They will work with you and your debtors to arrange a new repayment plan that better suits your needs.


5. Compare Interest Rates and Fees

When consolidating multiple debts into one, make sure you compare interest rates and fees. Settle on the option that gives you the lowest possible interest rates and fewest fees. And avoid options that penalize you for paying off the debt early.


Also, your debt consolidation expert should explain to you, clearly and succinctly, the terms of your debt repayment plan. You should know exactly how much to pay each month, when to pay it, and the length of the repayment period.


6. Reduce Unnecessary Spending

Have you reviewed your monthly expenses and feel you could trim down on a few luxuries?

Make a list of all the optional expenses in your budget. This could be paid TV/movie subscriptions, dining out, gym memberships, and buying premium brand groceries. Decide which luxuries to cut out entirely and which ones to minimise on spending.


Try to avoid cutting out luxuries that could severely impact your lifestyle. If you simply cannot live without TV/movie streaming services, make a shared family account with a group of friends or family. This will help reduce the total amount you pay each month, as the subscription cost, although higher, will be shared among multiple people.


7. Reduce Your Energy Bills

According to the AEMC Residential Electricity Price Trends 2021 report, the average annual electricity bill is $1,645. Changing the way you use your appliances and making minor building improvements can help reduce your annual energy bills.When using heating and cooling devices, set the thermostat correctly so you are not using more than you need to be comfortable. Each degree of heating in winter and cooling in summer can increase your energy consumption by about 5 to 10 percent.


The age and condition of your heating and cooling devices can also affect their performance and energy efficiency, so have them serviced at least once per year by a qualified technician.


Other energy-saving tips include:

  • Buy energy-efficient appliances. The savings they provide will add up over the lifespan of the appliance.
  • Many appliances use power in standby mode even when not in use. Consider turning them off (except fridges, freezers, medical equipment, and security systems).
  • Switch to energy-efficient LED bulbs for ceiling lights, lamps, and outdoor lights. They use about 80 percent less energy than halogen lightbulbs.


Lastly, stay on the lookout for more affordable energy providers. You could save a few hundred dollars on your annual energy bills by switching to a cheaper provider. Just be sure you understand their terms and fee structure before you switch.


Seek Expert Advice and Support

Trying to manage multiple debts at once can be stressful. Assessing your finances and implementing a smart debt control strategy is an effective way to regain control of your money, as well as enjoy some much-needed peace of mind.


For more information about Debt Fix’s debt consolidation services, get started with a free, no obligation questionnaire. It only takes 30 seconds and making an application won’t affect your credit rating.