This year’s resolution? Have less debt!

As the calendar year comes to a close, many people start thinking about their New Year’s resolution. Maybe you’ve already decided that this is the year you are going to lose 20 pounds, quit smoking, or make a career change. If you haven’t made a resolution yet, consider working towards decreasing (maybe even eliminating) your debt.

Do you have debt? You are not alone. Studies have shown that approximately 80% of Americans are in debt and the average amount of credit card debt is just over $5,000. Then there’s auto and student loans, mortgage payments, and personal loans. Debt can be an emotional and overwhelming topic, and many people just don’t want to think about it. After all, where do you even start?

First, you need to determine how much debt you have. For each debt, write down how much you owe, what the minimum payment is and what the interest rate is. Remember knowledge is power. This is also a great time to request a copy of your credit report through This is free and will not negatively affect your credit score.

Then review your budget (or create one if you don’t have one) and determine how much money you can put towards paying off your debt each month. Make sure that it is at least the total minimum amount. You may need to consider decreasing your spending in some areas. Cutting a daily cup of coffee, vending machine snacks, or other discretionary items can make a huge difference. Not buying a $4 cup of coffee on your way to work this year will save you $1,000 (assuming a 5 day work week and 2 weeks of vacation).

Now you are ready to determine how you want to pay off your debt. There are two popular methods to paying off debt: the debt snowball and the debt avalanche. Both have worked for people and it’s up to you which might work for you!

The debt snowball method involves you paying off your smallest debt first and making minimum payments on all of the other debts. Then you move to your next smallest debt and pay off that debt (using the money that you were using to pay off that first debt). 

The avalanche method is when you start by paying off the debt with the highest interest, while making the minimum payments on the other debts. This method is mathematically more efficient, but is not as motivational for most people. 

America Saves Week has created this document to help you compare the two methods. from Utah State Extension also has free tools to help you create your own avalanche or snowball plan. The two videos below can also help you determine which one might be the best for you.

Want to talk through this with someone? Reach out to our Financial Capability Extension Educator, Amy Mangan-Fischer at

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