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9 Effective Ways to Pay Off Your Debts

bayar hutang

Do you have a pile of debt and it seems like you are never going to get it cleared up anytime soon…or ever? You’re not the only one. We’ve rounded up these easy-to-follow strategies to help you pay off your debt effectively!

1 – Create a Budget

create a budget

The first step to clearing your debt is to create a budget. You can use an excel spreadsheet or finance manager apps to track your monthly income and expenses. This way, you can itemise all your expenditures and be able to see where you can spend more or less on.

2 – Pay off the most expensive debt first

pay necessities

Sort your debts from the highest to lowest interest rates or most important to the least. On top of that, you prioritise paying off the necessities first such as home loans/rental, car instalment, utilities, personal loans, groceries, and then miscellaneous or pocket expenses.

3 – Pay more than the minimum required

minimum payment

You should pay more than the minimum payment in your statement balance each month. Paying the minimum balance only offset your debt and prolong you clearing the sum of your debt, furthermore, it increases with your monthly interest rate.

4 – Avoid unnecessary spending

be smart with your cash

The best way to stop accumulating your debt is to stop spending! Of course, we don’t mean stop spending entirely, rather, think before you spend. Ask yourself is it worth buying or will you still need it OR use it 6-months from now? Practice this like a mantra until you have your finances in control.

5 – Make use of credit card benefits

credit card reward

If you have one (or more) of this plastic money, they can essentially do more than just buy things on a credit. Some credit cards allow you to move funds at 0% interest rate. If you have a sum of debt that you’re confident you can pay off in a few months, check with your bank to move the balance for a small (if not free) fee to speed up your debt clearance.

6 – Put work bonuses toward debt


If you receive a bonus or reward for your job, especially during year-end or festive season, allocate the money to pay off your debt instead of spending it. Avoid the temptation of splurging on a pick-me-up, it’s more important to get your finances right first!

7 – Sell unwanted gifts and household items

sell online

If you have any old gifts, decoratives or furniture you don’t need and is still in good hands, give it a good dustings and sell it off online to earn some quick cash. Put it up on marketplaces like carousell, or lelong at a reasonable price so it can sell quickly! Profits from the sale of these items should go into your debt clearing funds.

8 – Change your spending habits without sacrificing your lifestyle

teh tarik

At times, our daily habits are what got us into money problems. Think about how you spend your money daily, weekly and monthly. For instance, if you spend on a cup of teh tarik at the mamak every morning before work, it would be cheaper to bring a flask of the hot cuppa to work instead. The key is to ask yourself: how do I spend less without changing my lifestyle too much? Read up our tips to save money to help you get started!

9 – Reward yourself when you achieve your milestone!

reward yourself

Paying off your debt will be a long and painful journey if you look at it as a punishment to your lifestyle. Set a milestone or a pay-off goal and give yourself a small reward when it is met. This help keeps us motivated. Of course don’t go on a splurging frenzy, for example, instead of taking an outstation trip, settle for a weekend camping trip nearby.

There are also ways you can earn extra pocket money to help clear your debt faster, check out our article on how you can earn side income while having your day job . Have your personal tip to keep your debt in check? Share it with us in the comments section below!

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