Paying down debt can seem like a monumental task.
A few years after TV's Money Man programme, I followed up the young people featured and found quite a few had paid off tens of thousands of dollars of debt.
It can be done with a few strategies tucked under your belt.
Tackle the highest interest
The most logical way to pay off debt is the "avalanche" method, which starts by paying down the debt with highest interest rate. This is the one that would otherwise continue to grow the fastest unless tackled.
Pay off the small debts first
The most sensible strategies mathematically don't always work because the human brain isn't logical. Therefore strategies that trick our brains into thinking we're making inroads can actually lead to greater success.
Neuroeconomists have found that it's sometimes good to tackle the smaller ones first for the psychological boost. That's because it breaks down a huge task into smaller manageable parts.
In layman's terms this is called the debt snowball.
Snowballing pumps people up and the effect gains momentum. Academics in the United States analysed data and found that people who did this had longer term success.
Brian Pethybridge, manager of the North Shore Budget Service, says, in his experience, clients who succeed have started this way. But their repayment targets must be realistic.
Switch to lower interest loans
If your debt was racked up on credit cards or HP you're probably paying too much interest. Shop around. Go to your bank, check out credit unions and look for other options.
Some people choose to consolidate their loans into one "easy payment", as purveyors of debt consolidation loans point out.
But be careful that the lenders fees don't just make the situation worse and, once freed up, you don't start spending on your credit cards again.
Negotiate with your lender
It costs lenders to chase you, says Pethybridge. You may be able to negotiate an interest freeze directly with the lender or through a budget service. This means you can chip away at it without the outstanding sum continuing to rise.
It can be a good idea to get a Summary Instalment Order through the Insolvency Service, he says. It gives you extra time to pay back debt.
Get a part time job
To pay down debt you need to find extra money and/or spend less. A part-time job will bring in a few more dollars a week. Even if the hourly rate is less than your day job every dollar adds up.
Look for a niche in your local community for a part-time business. Plenty of Kiwis buy goods wholesale from Alibaba.com and sell them at a profit on Trade Me or direct. Or dedicate a fixed number of hours a week to selling unwanted belongings.
Check out the law
The Credit Contracts and Consumer Finance Act (CCCFA) has a requirement for lenders to ensure the loan arrangement is "affordable and suitable for your needs".
If you believe your lender hasn't acted reasonably and ethically or followed rules about disclosure and credit fees, you may be able to make a hardship application to the lender. You can complain to the Banking Ombudsman about your bank or Financial Services Complaints Limited if it's a finance company or other lender.
There have been cases where the interest has been wiped or the debt written off in extreme circumstances.
Other ways to get rid of debt is the "No Asset Procedure" (for up to $47,000), which lets you wipe the slate clean but is less onerous than bankruptcy; and bankruptcy. These procedures get rid of debt and they can be the answer for some people, says Pethybridge.
But being able to wipe the slate clean doesn't always change behaviour and the person may end up getting into the same mess again - especially those using the no-asset procedure (Nap) for debts built up by buying consumer goods on tick.
And, Pethybridge warns, you can only use the Nap option once.
Outsmart your brainIf you've got this far and pooh-poohed every idea then you may have fallen into the psychological trap that keeps many Kiwis in debt for life. Get a mentor, seek opinions from a budget adviser, read about how to get out of debt, and try something different.