My biggest priority right now is to pay off my debts, and that very motive is actually what kick-started PoundWise Journey. I realised I was in a bit of a financial black hole and decided it was finally time to sort it out.
I don’t aim to be debt-free overnight, that’s why I set myself realistic goals, I wanted a plan that’s relevant to my current situation and keeps me moving forward.
I’m still figuring things out and learning as I go. This plan is based on my personal situation and circumstances. If you’re in a similar situation to me, hopefully this will inspire you to create your own plan to pay off your debts.
UPDATE: Since writing this post, I’ve adapted my approach and decided to prioritise building an emergency fund over paying off my debt.
What I Owe Right Now
Here’s a quick summary of what I’m dealing with:
- Credit card balance: £1,850
- Very (Buy Now Pay Later) balance: £110
I know that compared to some people, my debt doesn’t seem like much, but for someone on a low income, it’s still enough to feel like a weight.
Being in debt limits what I can actually do with my money. I can’t save properly, I can’t even think about investing or building towards my future.
That’s why paying off this debt is my main priority for the foreseeable future.
My Debt Payoff Plan
This is the approach I’ll be using until I pay off my debts completely.
This is all based on what I can afford right now, it’s a realistic approach that will help me stay consistent.
1. Minimum Payments are Non-Negotiable
The first part of this plan is obvious, but important — never miss a payment.
At the bare minimum, I always make sure I make my minimum payments on my credit card and my Very account. I do this to avoid paying interest and to stop my credit score getting worse.
My Very balance is on ‘Buy Now, Pay Later’, so I don’t actually have to pay anything until January 2026. But instead of leaving it all until then, I’d rather spread the payments out monthly.
My credit card is currently interest-free until April 2026 due to a balance transfer promotion, as long as I make my minimum payments. So this is totally non-negotiable.
At the moment, I’m on a low income as I’m unemployed and on benefits. I know if I don’t find a job soon, there’s no chance I can pay off the whole credit card balance by next April. If that’s the case, I’ll have to find another interest-free offer or start paying interest, which I’d obviously rather avoid.
Even though money’s tight, making the minimum payments is a priority. I always make sure they’re covered in my budget before I even think about spending anything else.
2. Clear the Smallest Balance First
I want to get rid of the Very balance as soon as I can.
It’s only £110, so it’s much smaller than the credit card. But mentally, clearing this one first feels like a win. It gives me momentum, and one less thing to think about.
This is known as the debt snowball method, paying off the smallest balance first to build momentum.
My plan is to split the balance across the next few months and clear it bit by bit, without putting pressure on the rest of my budget.
I’m currently paying £20 per month, but any extra money I am able to save will also go towards paying this balance.
Even though the payment deadline isn’t until 2026, I don’t want to drag it out. The quicker I can get this off my plate, the more I can focus on the bigger challenge, the credit card.
3. Start Chipping Away at the Credit Card
Once my Very balance is cleared, I’ll fully focus on paying off my credit card.
Because of the interest-free period, I don’t need to overstretch myself by paying off more than I can afford right now. I can take a steady, consistent approach. At the moment, I’m paying £25 per month, which is slightly more than the minimum payment (with this particular card, it’s 1% of the balance).
Once the Very payments are finished, I’ll have an extra £20 per month to put towards my credit card. Just like with my Very balance, any extra money I have will also go towards paying off the credit card too.
I’ll be tracking all of this in my net worth reports anyway, so I’ll be able to see the steady progress month by month.
4. Stick to My Budget and Avoid New Debt
Sticking to my budget is one of the most important parts of this plan. It’s not just about tracking what I spend, it’s about being realistic with my money and not spending more than I have.
If I stick to my budget, I should be able to cover all my essentials, make my debt payments, and still be able to save a little bit. This means I won’t need to rely on credit or make any impulsive financial decisions.
Avoiding new debt is part of the mindset. I’m done with using credit as a backup plan.
What Happens After the Debt’s Gone?
It will probably take a long time for me to become debt free, but I’ve already decided what comes next.
While I’m paying off my debts, I am also trying to slowly build an emergency fund. That way, if something unexpected came up, I won’t have to rely on credit again.
After that, I want to start saving more seriously and eventually look into investing. But I know I can’t build long-term wealth until I’ve built a solid foundation first.
The first step in this process is to pay off my debts.
Final Thoughts
Paying off debt can feel like a mountain when you first start. But I’ve found that the key is to take things one step at a time and to keep things realistic.
I know this plan won’t clear all my debts by the end of 2025, but it keeps me moving in the right direction, which is enough for me.
The biggest change isn’t just the numbers, it’s the mindset. I’m being intentional with my money and staying accountable.
If you’re on your own debt-free journey, I hope this post shows you that you don’t need to be perfect. You just need to keep taking small steps and trusting the process. Considering my difficulty with sticking to things, this is something I often need to remind myself.