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How to break the cycle of debt

Aug 4, 2023

How to break the cycle of debtA strong theme that emerged in the Money Makeover Challenge this year was the extent to which applicants have built up large amounts of debt in a short period of time. This phenomenon is driven by the rising cost of living and increasing interest rates.

As households struggle to make ends meet, people become desperate and turn to credit to meet their monthly expenses. This is a very short-term solution – it’s simply kicking the can down the road, and results in even greater financial pressure once those debts need to be repaid, throwing people into a neverending debt cycle.

If you have multiple loans with high interest rates, one option is to consider debt consolidation, which is not to be confused with debt review.

Another debt repayment strategy is using the so-called “snowball method” to pay off debt, starting with the smallest debt first. The benefit of targeting the smallest debt first is that you have quick wins early on. This gives you a psychological boost to keep on track.

All of our Money Makeover candidates this year need to deal with the issue of debt. Take a look at the strategies that they are using to break the cycle of debt.


  1. I found myself having accumulated so much debt in the last 3 months, through the use of my credit card. And i am not proud of the purchases made as none of them was important. I will be applying the snow ball effect to pay my debt off but I also have to reduce the amount of money available to borrow from my credit card. Credot card has trully been a debt enabler for me

    • Thanks for the comment. Credit cards can be very dangerous. You can ask the bank to reduce the facility as you pay it down


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Maya Fisher-French author of Money Questions Answered


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