Debt has a way of quietly controlling your financial life. It can put pressure on your budget, making other goals (like saving and investing) feel harder than they should.
Thankfully, January can be a great time to reset your financial habits and make meaningful progress on paying down your debt. Even small changes early in the year can lead to significant progress by the time next December rolls around.
We spoke with financial experts about practical ways to pay down 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 chipping away at your debt, it’s helpful to review your credit report, especially if it’s been a while, says Melissa Cox, a CFP at Future-Focused Wealth in Dallas.
“You can’t fix what you don’t know, and catching errors early can save you thousands,” says Cox.
Pulling your credit report early in the year helps you:
Catch errors that could be costing you money.
Spot accounts you forgot about.
Give you a picture of how much debt you really have.
Identify any bills currently in collections.
You can request a free credit report from each major bureau — Equifax, Experian, and TransUnion — at AnnualCreditReport.com.
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 every account is accurate, especially if you’ve changed lenders, moved, or consolidated,” says Cox. Disputing errors won’t erase real debt, but it can improve your credit score — which in turn can unlock lower interest rates.
Read more: How to dispute errors on your credit report
Tracking your spending can help shine a light on behaviors you’ve normalized, such as that $12 subscription you forgot about or your dining purchases that are quickly rivaling your rent payment.
When you track your spending, you’ll quickly notice patterns emerge. “It will naturally change your spending habits because you know you’ll have to track it somewhere,” says Joe Conroy, a CFP and owner at Harford Retirement Planners in Bel Air, Maryland.
That awareness can help change your behavior without forcing yourself to adhere to ultra-strict budgeting rules. Tracking matters if you’re trying to reduce your debt because you’re giving every extra dollar a job. If your money leaks everywhere, your debt payoff 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 you do,” says Conroy. Use a budgeting app, a spreadsheet, or even your bank’s built-in tools to start tracking your spending if you don’t already.
Read more: Everything you need to know about creating a budget
Enrolling in automatic payments is one simple way to ensure you keep making progress on paying down 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, layer in extra payments manually when you can be intentional and focused.”
If you’re trying to figure out how much of your income to put toward your debt each month, consider the 50/30/20 budgeting rule. It allocates 50% of your income toward monthly essentials (think housing costs and groceries), 30% toward non-essentials, and 20% toward savings or paying down debt.
If eliminating debt is a top priority in 2026, you might allocate the full 20% to paying down your balances. Or, you might take a dual approach, putting 10% toward debt and 10% toward savings. Either way, the 20% benchmark can be a good starting point when deciding how large to make your automatic debt payment, though everyone’s budget is different.
Read more: How the 50/30/20 rule can keep you on track
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 inner dialogue sounds like “I’m bad with money” or “I already messed this up,” you’re more likely to quit when progress slows.
“I see too many folks dwelling on the past, which often stops them from consistently working to reduce their debt and increase their savings,” says Baim. Instead, he recommends focusing on achievable wins early on, 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 easy and early wins can help you shift from feeling overwhelmed to feeling empowered,” says Baim.
Read more: 7 ways your brain can sabotage your finances
The beginning of a new year can be an excellent time for a spending reset. During a spending freeze, you temporarily cut non-essential spending — things like eating out, impulse shopping, upgrades, and “nice-to-haves” — and redirect that money toward high-interest debt.
Remember, you’re not saying “never again,” you’re saying “not right now.”
“Sometimes, we just need a lifestyle reset to remind ourselves what we actually value versus what’s become automatic spending,” says Cox.
During the freeze:
Keep paying essentials like housing, utilities, groceries, and transportation.
Pause discretionary spending wherever possible.
Redirect every saved dollar toward debt.
Even a modest freeze from January to March can free up hundreds or thousands of dollars. More importantly, it can help break bad financial habits. When April comes around, reintroduce spending intentionally — with clearer priorities and less debt weighing you down.
Read more: What is a no-spend challenge, and is it right for you?
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