If you feel like you’re never going to be able to pay off your debt, you’re not alone. According to a 2026 Bankrate Survey, about 22% of cardholders with a balance say they don’t think they’ll ever pay it off. With credit card interest rates averaging 19%, it might be time to learn how to create a budget that will help you pay off your debts more strategically and efficiently.
Follow these tips for budgeting your way out of credit card debt.
Add Up Your Expenses and Debt
It’s time to sit down with all of your monthly bills and debts to figure out exactly how much you owe each month, including credit card debt, household expenses, auto loans, student loans, and money spent on recreation and entertainment.
Know Your Monthly Takehome
Now that you know all your monthly expenses, totaling your monthly take-home pay against your expenses lets you see how much breathing room you have, as well as how much you have leftover to pay toward your debt.
Make Spending Cutbacks
While you can’t just cut back on what you pay toward your mortgage or rent, you can cut back on the non-essentials. This means entertainment, like streaming services, shows, or going to the movies; expensive recreation; and dining out. No one is saying you can’t have fun anymore—find activities to do that don’t cost a lot, like going to a park, watching a movie, or hosting a game night with friends.
Find the Right Repayment Strategy for You
Not sure where to start? Experts often recommend two repayment strategies that can provide a solid course of action. The debt snowball gives you quick wins by advising you pay the most toward your smallest balance first, while maintaining minimum payments on other debts. When the smallest one is paid off, you move on to the next smallest one. The debt avalanche works the same way, except you focus on your highest interest rate debt first, moving onto the next one when that’s paid off.
Talk to a Credit Counselor About a Debt Management Plan>
For those dealing with multiple debts and feeling like there's no way out, a certified credit counselor can help. Not only can they help you build a personalized budget, they can set you up with a debt management plan (DMP), working directly with your lenders to consolidate your debts into one manageable monthly payment at a lower interest rate, designed to help you pay off in three to five years.
Debt can feel overwhelming, but with the right steps and a strategy built around your situation, financial freedom is closer than you think.