When you're juggling debts, savings goals and everyday bills, the hardest question is often where to start. There's no universal answer, but there is a useful principle: money spent on high interest is money that can't work for you anywhere else. In most situations, tackling it early makes everything that follows easier.
Why interest comes first
Interest is the cost of borrowing, and on some forms of credit it is very high. A balance on a high-interest credit card or overdraft can grow faster than most savings accounts can earn. Paying it down is effectively a guaranteed return equal to the interest you no longer pay.
But not only interest
Focusing on debt doesn't mean ignoring everything else. A sensible order for many people looks like this:
- Essential bills and priority debts — housing, energy, council tax and anything with serious consequences for non-payment.
- A small starter buffer — even a modest cushion stops the next surprise going straight back onto a credit card.
- Minimum payments on everything — to avoid fees and credit damage.
- Extra payments on the highest-interest debt — then move to the next once it's cleared.
Two methods, both valid
The "avalanche" method targets the highest interest rate first and usually costs least overall. The "snowball" method clears the smallest balance first for quick wins. The best method is the one you'll stick with. Motivation is a financial asset too.
Avoiding the shame spiral
Many people delay looking at their debts because it feels bad. That delay is often the most expensive part. Opening the statements, writing the numbers down and making a plan — any plan — is the step that matters most.
If debts feel unmanageable, free and confidential debt advice services can help you understand your options. Asking for help early is a sensible financial decision, not a failure.
This article is general information, not personal financial advice. Speak to a qualified adviser about your circumstances.