7 Steps Out of Debt

Over the last several weeks, we’ve laid the spiritual and practical foundation for your journey out of debt.

We began with Step 1 – Pray for Wisdom and Strength, recognizing that lasting financial change starts with surrender and divine guidance.
Then came Step 2 – Stop Using Credit Cards, cutting off the source of new debt so your efforts to get out of the hole aren’t undone by continued borrowing.
In Step 3 – Establish a Realistic Budget, you gave your money purpose—assigning every dollar a job and building a plan to live with intention.
Step 4 – List Your Assets reminded you that you're not starting from zero. God has already placed resources in your hands, and clarity around what you own brings encouragement and strategy.
Last week, in Step 5 – List Every Debt, you took the courageous step of facing your full financial reality. By naming your debts, you stripped them of their power to control you. Fear thrives in the unknown—freedom begins with truth.

Now, we move into Step 6 – Build Your Debt Repayment Plan. This is where all the preparation turns into action. You’ve prayed, planned, listed, and counted. Now it’s time to decide how you’re going to pay down your debt—step by step, with focus, faith, and strategy.

💡 This Week’s Focus: Turn Your List Into a Plan
Last week, you did the brave work of listing every debt—credit cards, student loans, car notes, medical bills, IRS payments, and more. That was the hard part: facing the facts. But now comes the hopeful part: building your plan to pay them off.

This step is where things start to shift. With a clear strategy in place, what once felt overwhelming begins to feel manageable. You move from guessing to knowing, from reacting to planning. You’re no longer just hoping things will get better—you’re creating a roadmap to make it happen.

Here’s the truth: there is no one-size-fits-all strategy. The best debt repayment plan is the one you’ll stick to. It doesn’t have to be fancy. It just has to keep you focused, consistent, and making progress.

The goal here isn’t perfection—it’s momentum.
Because momentum builds motivation. And motivation builds breakthrough.

This week, you’ll choose the method that fits your mindset, your money, and your season of life. Whether you want fast wins or maximum savings, there’s a plan that will help you stay the course—and step into the financial freedom you’ve been praying for.

📖 Verse of the Week
Proverbs 21:5 (NLT):
“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.”

This step isn’t about shortcuts. It’s about steady, consistent progress. You’re building something that lasts.

Step 6: Build Your Debt Repayment Plan

Now that you know what you owe, it’s time to decide how you’ll pay it down. This is where strategy meets action.

There are two proven approaches to debt repayment—each effective in its own way. The key is to choose the one that fits your personality, keeps you motivated, and gets you to the finish line.

The Snowball Method

How it works:
With the snowball method, you list all your debts in order of balance size, from smallest to largest—ignoring the interest rate for now. Your focus is on building traction.

You’ll continue to make minimum payments on every debt, but direct every extra dollar you can toward the smallest debt on your list. Once that one is paid off, you take the full amount you were paying on it and roll it into the next smallest balance. This “snowball” effect grows your payments with each win—like a snowball rolling downhill.

For example:

Why it works:
The snowball method gives you quick, emotional victories. Seeing balances disappear—even small ones—boosts your motivation and builds the belief that becoming debt-free is possible. It’s about creating psychological momentum that keeps you in the fight.

Debt freedom is not just math—it’s motivation.
And the snowball method speaks directly to the heart.

Best for people who:

• Feel overwhelmed and need to see progress early

• Are motivated by quick wins

• Want a plan that keeps them emotionally engaged

• Need help building confidence and consistency

The Avalanche Method

How it works:
With the avalanche method, you organize your debts by interest rate, from highest to lowest—regardless of balance size. Your goal here is to minimize the total amount of interest you’ll pay over time.

You’ll continue making minimum payments on all debts, but direct every extra dollar toward the debt with the highest interest rate. Once that’s paid off, roll that full payment into the next highest rate, and so on.

For example:

Why it works:
The avalanche method saves you the most money over time. By attacking high-interest debts first, you reduce the amount that lenders collect from you—and that helps you get out of debt faster.

This method is based on math—and it works.
The fewer interest charges you pay, the quicker your path to freedom.

Best for people who:

• Are motivated by logic and long-term savings

• Want to minimize total interest paid

• Feel confident staying focused even if early wins take longer

• Prefer a strategic approach rooted in financial optimization

Snowball vs. Avalanche: Which One Is Right for You?

Choosing Your Strategy

Pick the Snowball Method if you:

• Feel emotionally overwhelmed and need small wins

• Want to build momentum quickly

• Struggle with consistency

• Value motivation more than minimizing interest

Pick the Avalanche Method if you:

• Want to pay off debt as efficiently as possible

• Have the discipline to stay the course

• Prefer logic and long-term financial optimization

• Want to minimize interest and keep more of your money

Can’t Decide? Mix the Two.
Many people find success by:

• Using the Snowball Method to knock out a few small balances quickly

• Then switching to the Avalanche Method for larger, high-interest debts

What matters most is not perfection—it’s consistency.
Choose the method that fits your personality, keeps you engaged, and moves you steadily toward freedom.

Pro Tips for Sticking with Your Plan

• Track your wins – What gets measured gets managed. Use a spreadsheet, debt tracker, or payoff chart to monitor your progress. Watching the numbers go down builds confidence and momentum.

• Celebrate milestones – Every time you pay off a debt—no matter the size—take a moment to celebrate. Progress is powerful, and small wins lead to big results.

• Revisit your budget monthly – Adjust your plan as needed. As debts are paid off or income increases, redirect those funds to your next target. This keeps your strategy fresh and your progress steady.

🎯 Weekly Challenge: Build Your Payoff Plan

This week, take action on your strategy:

• Choose your debt payoff method: snowball or avalanche

• Put your debts in the right order based on that method

• Make a plan for how much you’ll pay each month

• Circle a date on the calendar for when you’ll be debt-free if you stay on track

Take a screenshot of your list or write it in a journal.
This is your roadmap. You’re not just hoping for change—you’re planning for it.

💬 Reflection Questions

• Which debt payoff method feels more motivating to me: snowball or avalanche?

• What small sacrifice can I make this month to speed up my payoff?

• How would I feel knowing I was free from debt this time next year?

• What does financial freedom make possible for me and my family?

📢 What’s Coming Next
Next week, we’ll wrap up with Step 7: Stay the Course—how to stay consistent and avoid falling back into the trap once you start making progress.
It’s not just about getting out of debt—it’s about staying out.

🔁 New here or missed a few? You can read all the previous newsletters right here: financebyfaith.beehiiv.com

Blessings and financial peace to you!