Debt has a way of silently controlling your financial life. It can put pressure on your budget, making other goals (like saving and investing) seem more difficult than they should.
Fortunately, January can be a good time to reset your financial habits and make significant progress paying off your debts. Even small changes at the beginning of the year can lead to significant progress by the time next December rolls around.
We spoke to financial experts about practical ways to pay off debt early and avoid carrying it throughout 2026. Here’s what they said.
If you want 2026 to be the year you finally turn things around, you’ll need a plan that’s realistic, repeatable, and durable enough to work even after your motivation fades.
Before you start reducing your debt, it’s helpful to do so, especially if it’s been a while, says Melissa Cox, CFP at Future-Focused Wealth in Dallas.
“You can’t fix what you don’t know, and catching errors early can save you thousands of dollars,” says Cox.
Getting your credit report early in the year will help you:
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Spot errors that could cost you money.
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Detect accounts you forgot.
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Give you an idea of how much debt you really have.
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Identify invoices currently in collections.
You can request a free credit report from every major bureau (Equifax, Experian, and TransUnion) at .
As you review your reports, look for red flags, such as accounts you don’t recognize, incorrect balances, late payments that never occurred, or closed accounts marked as open.
“Confirm that all accounts are accurate, especially if you changed lenders, moved, or consolidated,” Cox says. Discussing mistakes won’t erase the actual debt, but it can, which in turn can unlock lower interest rates.
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Tracking your spending can help shed light on behaviors you’ve normalized, like that $12 subscription you forgot about or your dinner purchases that quickly rival paying your rent.
When you track your spending, you’ll quickly notice patterns emerging. “Naturally, you’ll change your spending habits because you know you’ll have to track them somewhere,” says Joe Conroy, CFP and owner of Harford Retirement Planners in Bel Air, Maryland.
That awareness can help you change your behavior without forcing yourself to follow ultra-strict budgeting rules. Tracking is important if you’re trying to reduce your debt because you’re putting every extra dollar to work. If your money is flying everywhere, paying off your debt becomes a moving target, no matter how motivated you feel.
“When you don’t track what you spend, you always spend more than you think,” Conroy says. Use a , a , or even your bank’s built-in tools to start tracking your spending if you haven’t already.
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Signing up for automatic payments is a simple way to make sure you stay on track to pay off your debt, especially if you plan to pay more than the minimum due. It also reduces the chance of late payments, which protects your credit score and helps you avoid fees.
“Automation ensures the basics are covered,” says Cox. “Then add additional payments manually when you can be intentional and focused.”
If you’re trying to figure out how much of your income to put toward debt each month, consider the 50/30/20 budgeting rule. You allocate 50% of your income to (think housing and grocery costs), 30% to non-essential items, and 20% to savings or debt repayment.
If eliminating debt is a top priority in 2026, you could allocate the full 20% to paying down your balances. Or, you could take a two-pronged approach: put 10% toward debt and 10% toward savings. Either way, the 20% benchmark can be a good starting point when deciding how much to automatically pay off your debt, although everyone’s budget is different.
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Sometimes we can be our own worst enemies when it comes to paying off debt, says Nate Baim, CFP and founding member of Pursuit Planning and Investments in Portland, Oregon. If your self-talk sounds like “I’m bad with money” or “I already blew it,” you’re more likely to quit when progress slows.
“I see a lot of people thinking about the past, which often prevents them from consistently working to reduce their debt and increase their savings,” Baim says. Instead, he recommends focusing on achievable gains from the beginning, such as paying off a small loan or using credit card points to reduce your existing balance. This helps build confidence and momentum, both of which keep you in the game long enough to see real results.
“These early, easy wins can help you go from feeling overwhelmed to feeling empowered,” Baim says.
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The start of a new year can be a great time to reset spending. During a spending freeze, you temporarily cut back on non-essential spending (things like eating out, impulse purchases, home improvements, and “nice to haves”) and redirect that money toward high-interest debt.
Remember, you’re not saying “never again,” you’re saying “not now.”
“Sometimes we simply need to reset our lifestyle to remind ourselves of what we truly value versus what has become an automatic expense,” Cox says.
During frost:
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Continue paying for essentials like housing, utilities, groceries, and transportation.
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Pause discretionary spending whenever possible.
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Redirect every dollar saved toward debt.
Even a small freeze from January to March can free up hundreds or thousands of dollars. More importantly, it can help you break bad financial habits. Come April, reintroduce spending intentionally, with clearer priorities and less debt weighing you down.
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