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Home / What Is a Do-It-Yourself Debt Strategy? Check If It Works For You

What Is a Do-It-Yourself Debt Strategy? Check If It Works For You

Debt Strategies Do it yourself

If you’re struggling with your finances, then you may want to try a do-it-yourself debt strategy. Most have money problems due to psychological reasons rather than financial ones. While some take on huge debts due to emergencies, more people rack up payments from unnecessary purchases.

Often, people live beyond their means in exchange for paralyzing masses of unpaid balances. As a result, many people are unable to access many services and products they sorely need. To avoid such circumstances, you must do it yourself. Follow the debt strategies listed below, so you can achieve financial freedom.


What Is a Do-It-Yourself Debt Strategy?

A Do-It-Yourself debt strategy involves managing and reducing your debt independently, without the assistance of professional debt relief services. This approach typically includes methods like the debt snowball and debt avalanche techniques, which focus on prioritizing and systematically paying off debts.

By adopting a DIY debt strategy, you maintain full control over the process and avoid potential fees associated with debt management or settlement companies. Moreover, this strategy empowers individuals to develop and strengthen their financial management skills. However, it requires discipline, commitment, and a solid understanding of personal finance to effectively implement.


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How Does a Do-It-Yourself Debt Strategy Work?

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A Do-It-Yourself debt strategy works by allowing individuals to take charge of their financial situation through structured and disciplined repayment plans. First, you assess all your debts, noting down the amounts, interest rates, and minimum payments for each. By applying extra funds to one debt at a time, you accelerate the repayment process for each subsequent debt. This self-managed approach requires careful budgeting and may involve cutting expenses or finding additional income sources to allocate more money toward debt reduction.


Read More: 5 Ways to Get Out of Debt


How to DIY a Debt Strategy?

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To successfully DIY a debt strategy, follow these structured steps to ensure you manage and reduce your debt effectively:


Assess Your Debts

Start by listing all your debts, including credit card balances, loans, and any other financial obligations. Note the total amount owed, interest rates, and minimum monthly payments for each. This initial assessment is crucial as it provides a clear picture of your financial landscape and identifies which debts are costing you the most in interest. Group your debts by type and priority, determining whether they are secured or unsecured, as this will influence your repayment strategy.

Once you have all the details laid out, calculate the total amount you owe across all debts. This aggregate figure is important for understanding the scale of your debt and planning the overall length of your repayment period. It’s also helpful to rank your debts either by the size of the debt or the interest rate, depending on whether you’re considering the snowball or avalanche method for repayment. Be thorough in this step—accurate information forms the backbone of an effective DIY debt strategy.


Make a Budget for Your Do-It-Yourself Debt Strategy

A budget is just a written plan detailing how you will spend your money. It is your way of allocating your monthly income into each of your needs and wants. Some people mistakenly assume that a budget shackles them since it prohibits buying stuff. However, they might be doing it wrong because there is a budget plan that allows buying non-essentials.

Do-it-yourself debt reductions strategies like the 50/30/20 budget don’t have to be too restrictive. To use it, you must first calculate your income after tax deductions. Then, spend 50% of it on necessities like groceries and monthly payments like basic utilities. If it isn’t enough to cover those, you may need to deduct from your “wants” allocation. 

This is the amount set aside for stuff you want, roughly 30% of your monthly income. You should have some fun too, so you’re more likely to stick with your financial plan. In addition, it serves as an extra amount you need to cover a sudden or neglected expense. Your budget must account for unexpected payments since people usually have to in real life.

Lastly, the remaining 20% must be used to pay off your debts. List your personal loans and credit card debts, and figure out which ones to pay back. Also, this must enable you to save money for a rainy day. If there is any left, keep it as an emergency fund, so you can use it when the need arises.


Diligently Make Payment

Once you’ve made your personal budget plan, it’s time for constant and on-time payments to your lenders. As you may know, late payments have corresponding costly penalties and fees. In addition, merely paying the minimum lets interest build up over time. As much as possible, pay above your minimum payments in order to avoid accumulating excessive interest.

Diligent payments improve your credit score as it shows you reliably repay your debts. After all, it’s a number that proves how much your lenders can trust that you’ll pay them back. If you turn in tardy payments, your rating will lower and your lenders’ trust will wane. This is one of the do-it-yourself debt reduction strategies that truly help long-term.


Track Your Progress

Regularly monitor your debts and adjust your budget as necessary. Celebrate milestones to stay motivated. Keeping an updated record of your payments and remaining balances is essential for maintaining momentum and ensuring you are on track with your debt reduction plan. Use tools like spreadsheets, budgeting apps, or financial software to make this tracking easier and more efficient. Every time you pay off a debt, update your records to reflect this change and review your overall financial plan to accommodate any new circumstances.

Celebrating milestones, such as paying off a credit card or reducing a significant percentage of your total debt, is crucial for keeping your morale high. Consider setting small rewards for each milestone achieved to make the process feel more rewarding. Additionally, share your progress with a supportive friend or family member who can help encourage you to keep going. Over time, tracking your progress not only helps in keeping your finances under control but also builds valuable habits of financial discipline and responsibility.


Stay Disciplined

Remain committed to your repayment plan. Avoid accruing new debt while you’re paying off the current balances. Discipline is the cornerstone of any successful DIY debt strategy, requiring you to consistently adhere to your budget and make payments on time. To help maintain this discipline, set up automatic payments for your debts, ensuring you never miss a deadline. Additionally, try to cut back on discretionary spending and redirect those funds towards your debt repayment.

It’s also important to regularly review your financial plan to adapt to any changes in your income or expenses. If you receive any extra money, such as a bonus or tax refund, consider using it to pay down your debts faster. Remember, the goal is not just to pay off what you owe but to also build a sustainable financial future free from debt. Cultivating these habits will not only help you during the repayment phase but will also instill financial discipline that can benefit you for years to come.


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Pros of a Do-It-Yourself Debt Strategy

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Control and Flexibility

Managing your own debt repayment plan gives you full control over your financial decisions and strategies. You can adjust your repayment plan based on changes in your financial situation without needing to consult a professional.


Cost Savings

By handling debt repayment yourself, you avoid fees associated with hiring a debt relief service or credit counselor. This can translate into significant savings, allowing more of your money to go directly toward reducing your debt.


Financial Education

Engaging deeply with your financial situation improves your personal finance knowledge and skills. This educational aspect can empower you for better money management in the future.


Read More: Assets vs. Liabilities: Understand the Key to Finances Now


Cons of a Do-It-Yourself Debt Strategy

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Requires High Discipline

Without the external motivation provided by a professional or service, maintaining the discipline to stick to a repayment plan can be challenging. This can lead to inconsistencies that may slow down your debt repayment progress.


Potential for Stress

Managing your own debt can be stressful, especially if you have a large amount of debt or complex financial situations. The responsibility of making the right decisions and the constant monitoring can be overwhelming.


Lack of Negotiation Leverage

Professionals often have more experience and tools to negotiate better terms with creditors, such as reduced interest rates or settlements. Doing it yourself might not yield the same concessions, which could result in higher overall costs.


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Alternatives to a DIY Debt Strategy

While a DIY Debt Strategy offers control and potentially saves on fees, it’s not the only path for managing and reducing debt. For those who might need more structured or professional guidance, there are several effective alternatives to consider:

Debt Management Plans (DMPs)

Engaging with a credit counseling agency to enroll in a DMP can help consolidate your debts into a single monthly payment, often with reduced interest rates. This option provides structured support and can simplify your payment process.


Read More: What is a Debt Management Plan? (DMP)


Debt Settlement Companies

These companies negotiate with creditors on your behalf to settle your debts for less than what you owe. While potentially reducing your debt load significantly, this method may also impact your credit score negatively.


Read More: What Is Debt Settlement?


Credit Counseling

Professional credit counselors offer personalized advice and can help devise budgeting plans and strategies to manage debt more effectively. They can also provide financial education to help prevent future debt issues.

Each of these alternatives comes with its own set of advantages and challenges, and choosing the right one depends on your specific financial needs and circumstances. Consulting with financial professionals can help determine which option aligns best with your financial goals and current situation.


Read More: Debt Strategies: Credit Counseling



Refinancing is a strategic option where you replace an existing debt with a new loan, typically at a lower interest rate. This can be particularly effective for high-interest debts like credit cards and personal loans. By refinancing, you can consolidate multiple debts into one payment, potentially reducing your monthly financial burden and simplifying your finances.


Read More: Debt Strategies: Cash-Out Refinance



For those with insurmountably high debt, filing for bankruptcy may be a viable option. While it can provide legal protection and potentially discharge debts, it has long-lasting effects on your credit history and financial standing.


Read More: What Is Bankruptcy? Learn Why It Is Your Last Option



When it comes to debt reduction strategies, there are many do-it-yourself options available. However, these still require dedication and discipline to pull off. In order to stay financially stable, you must keep such frugal values in your daily life. As tremendous expenses like student loans are necessary, many people borrow for things that aren’t, saddling them with huge debts.

There are other debt reduction strategies available, such as balance transfer credit cards. Moreover, you may follow the debt snowball method that starts with the smallest debts first. If you require additional assistance, then you may want to ask a credit counseling company for help. Use every method at your disposal, and you’ll soon find yourself free from debt! 

Frequently Asked Questions

Can I negotiate with creditors in a DIY debt strategy?

Yes, negotiating with creditors is a part of many DIY debt strategies. You can contact creditors to negotiate lower interest rates, request waivers of late fees, or discuss restructuring your debt terms. Successful negotiation can reduce your debt load and aid in faster debt elimination.

It’s wise to review and adjust your DIY debt strategy at least every six months or any time there’s a significant change in your financial situation, such as a new job, a raise, or unexpected expenses. Regular reviews ensure that your plan remains effective and responsive to your current financial needs.

While a DIY debt strategy can be effective for many types of consumer debt, such as credit card debt and personal loans, it may not be ideal for complex debts like large medical bills or student loans, where specialized repayment plans or forgiveness programs may be available.

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