If you’re in debt in 2025, you’re not alone. Millions of Americans deal with credit card balances, personal loans, and other financial burdens. The good news? Paying off debt is possible with the right strategy and commitment.

Prioritizing high-interest debt, avoiding payday loans, and creating a realistic repayment and spending plan can help you achieve financial freedom. Follow this guide to take control of your debt and make 2025 the year you pay it off for good.

Put Your Tax Refund Into Debt Repayment

Tax season presents a golden opportunity to make a serious dent in your debt. The average tax refund in the U.S. is around $3,000, which can make a huge impact if used wisely. Instead of splurging on a big purchase, consider putting that refund toward high-interest credit card debt or personal loans.

Here’s why it’s a smart money move:

• Paying off a chunk of your balance can reduce interest costs, helping you get out of debt faster.
• A lower balance can improve your credit score by decreasing your credit utilization ratio.
• If you don’t have an emergency fund, consider setting aside a portion to avoid relying on credit cards for unexpected expenses.

Financially savvy households use tax refunds to strengthen their financial position rather than spending on non-essential purchases. Make this year’s refund work for you!

Make a Prioritized Payoff Plan

Not all debt is created equal, and having a well-planned approach can help you pay it off as quickly as possible while avoiding extra interest costs. One of the best methods is the debt avalanche strategy. Follow these steps to wipe out your loans with the debt avalanche:

1. List all your debts, including balances, interest rates, and minimum payments.
2. Continue making minimum payments on all debts.
3. Put any extra available funds toward the debt with the highest interest rate.
4. Once that debt is paid off, move to the debt with the next highest interest rate and repeat the process until you’re debt-free.

This method saves you the most money in interest over time. But remember, it only works if you avoid taking on more debt and keep your spending under control.

Budgeting is key to staying out of debt. Payactiv’s free budgeting features help you track your spending and empower you to cut unnecessary expenses. If you don’t already have Payactiv, you can download it today from the App Store or Google Play.

Boost Your Earnings to Accelerate Debt Repayment

Increasing your income can speed up the debt repayment process. Here are some practical ways to earn extra cash:

• Ask for more hours or overtime at work – If your employer allows it, working extra shifts can quickly add to your debt payoff fund. With Payactiv, you can get paid right away after your shift.
• Use gig apps. To make extra money on your schedule, consider rideshare driving (Uber/Lyft), delivering food (DoorDash, Uber Eats), or pet-sitting (Rover).
• Sell unused items – Declutter your home and sell items on eBay, Facebook Marketplace, or OfferUp.
• Freelance or offer services online – If you have a skill like writing, graphic design, or web development, platforms like Fiverr and Upwork can connect you with clients.
• Start a small side hustle – Whether making crafts to sell on Etsy, tutoring, or lawn care, a side hustle can bring in extra income without a major time commitment.

Additional work to increase your earnings doesn’t have to be a permanent lifestyle change—just long enough to make meaningful progress on your debt.

Start Your Debt Repayment Plan Today

The journey to being debt-free starts with a plan and a commitment. By using your tax refund wisely, prioritizing high-interest debt, and finding ways to increase your income, you can take control of your financial future.

If you’re struggling to manage your money, Payactiv is here to help. Our financial wellness platform offers free budgeting tools, automated saving¹, and even no-cost financial coaching to help you stay on track.

Ready to start your debt repayment journey? List out your debts, chart out your payoff plan, and put yourself on track to thrive.

¹Goal-based saving is a set-aside account, and you will not receive interest or other earnings on funds in your goal-based account.

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