Updated September 25, 2025 by Samantha

Managing debt can feel overwhelming, but with the right plan, you can take control of your finances and work toward freedom. These six clear steps provide a simple roadmap to lower debt, build better money habits, and reduce financial stress.

Learn to reduce debt and create a better financial health.

Being buried under debt makes it tough to save enough for a rainy-day fund or for retirement. Learning how to reduce debt—while saving for longer-term goals—is critical to your overall financial health.

It’s time to think about debt reduction when you:

- Have debt payments (including house loan, car loan, credit card balances, and other debt) that are more than 35% of your gross income

- Pay your monthly bills late on a regular basis

- Can only make the minimum payment on your credit card bills

- Reach the available credit limits on your credit cards

- Have recently been denied credit

Debt reduction steps

1. Create a new budget. You may already have a budget in place, but if your debt is increasing, now is the time to revisit it to see exactly where you’re spending more than you had planned. Your new budget should factor in long-term savings goals, like retirement.

2. Know what you owe. It helps to know exactly what you’re facing when reducing your debt. Gather all your latest credit card statements, loan papers and bank statements.
Add up the combined total to get a full understanding of how much debt you have—and when it’s due.

3. Pay more than the minimum. Paying off a high-cost debt takes a long time if you consistently pay just the minimum amount due. In addition, you could end up paying more because of accumulating interest charges.

4. Ask your credit card company for a lower rate. If you’re a good customer with a strong credit history, many companies will honor your request rather than risk losing you to the competition. If you’re carrying a high balance on a card, a lower rate could save you hundreds or even thousands of dollars in interest charges over time.

5. Dip into savings temporarily. If you’re paying higher interest on your debt than you’re earning on savings, consider using at least some of your savings for debt reduction. After you pay down your debt, set a goal to have enough savings in an emergency fund to cover three to six months of living expenses.

6. Get help. Aside from support from family members or friends, consider seeking the services of a trained, certified, financial planner or advisor. A planner can usually offer free or low-cost guidance on managing your money, working through financial problems and developing a personalized plan to achieve debt elimination.

Whether you want to safeguard your family, expand your wealth, or explore new career paths, FTA is here to guide you every step of the way.

FTA Wealth Solutions is a one-stop financial consultancy in Malaysia, offering holistic services from financial planning and nomination to will writing. As an approved HRDF Corp (Human Resource Development Fund) training provider, we also deliver structured financial literacy and professional development programmes. With over 20 years of industry experience and partnerships with leading providers, we help Malaysians protect, grow, and secure their wealth with clarity and confidence.

Contact

5-1-3, Jalan 2/109F,
Danau Business Centre, Taman Danau Desa,
58100 Kuala Lumpur

Info

Resources

Social media

©  FTA WEALTH CONSULTANCY SDN BHD (1282048-A). All Rights Reserved.