Getting Out of Debt in Ireland: A Practical, Judgment-Free Guide
- Sid Hegde
- Apr 6
- 6 min read
Updated: Apr 7
By Sid Hegde, QFA and Financial Coach | Galway, West of Ireland
Let me be very clear about one thing before we start.
If you are carrying debt right now — whether it is credit card debt, a personal loan, a car finance agreement, or something else — it does not mean you have made bad decisions. It does not mean you are irresponsible. And it certainly does not mean you are beyond help.
It means you are human, living in a country where the cost of living has made financial breathing room genuinely difficult, and where the systems around credit make it very easy to accumulate debt without fully noticing.
I work with professionals across Galway and Ireland who earn good salaries and still carry debt. People who are doing their best but feel stuck in a cycle that never quite moves. People who have the income to make progress — but not the structure to make it happen.
This blog is for them. And for anyone else who wants a clear, practical, realistic plan for getting out of debt — without shame, without jargon, and without the kind of advice that sounds good in theory but falls apart in real life.
First: Understand the Emotional Weight of Debt
Before we get into strategies and numbers, I want to acknowledge something important.
Debt does not just create financial pressure. It creates psychological pressure. It occupies mental space. It affects how you feel about your work, your choices, your future. Research consistently shows that financial stress is one of the leading contributors to anxiety, sleep disruption, and relationship strain in Ireland.
The weight of debt is not just about the numbers on a statement. It is about the way it makes you feel every time you check your account. The way it makes you hesitate before doing something you want to do. The quiet background stress that rarely goes away.
Naming that is not self-indulgence. It is important — because getting out of debt is as much a psychological and behavioural challenge as it is a mathematical one. Anyone who tells you otherwise has not spent much time actually helping people do it.
"Debt is not a character flaw. It is a structural problem. And structural problems have structural solutions."
Step 1: Get the Full Picture
The first step — and the one most people avoid — is knowing exactly where you stand.
This means sitting down and listing every debt you have:
The lender or creditor
The outstanding balance
The interest rate being charged
The minimum monthly payment
The original purpose of the debt
Most people know roughly what they owe. Fewer know the interest rate. Almost nobody has it all in one place.
Until you can see the complete picture, you cannot make an informed decision about how to approach it. This is not about making yourself feel bad. It is about getting the information you need to take control.
Step 2: Understand the Two Main Repayment Strategies
There are two well-established approaches to paying down multiple debts. Neither is universally 'right' — the best approach depends on your numbers and your psychology.
The Avalanche Method (Mathematically Optimal)
With the Avalanche Method, you pay the minimum on all debts and throw any extra money at the debt with the highest interest rate first. Once that is cleared, you roll the full payment onto the next highest rate debt, and so on.
This approach minimises the total interest you pay over the course of your repayment. If you are a structured, analytical person who can stay motivated by knowing you are being mathematically efficient, this is the method to choose.
The Snowball Method (Psychologically Powerful)
With the Snowball Method, you pay the minimum on all debts and attack the debt with the smallest balance first — regardless of interest rate. When that debt is cleared, you add that payment to the next smallest balance, creating momentum.
This approach generates early wins. And early wins are enormously valuable psychologically. If you have ever started a debt repayment plan and abandoned it after a few months, the Snowball Method might be more sustainable for you — even if it costs a little more in interest over time.
The best debt repayment strategy is the one you actually stick to. Choose the method that fits your personality.
Step 3: Find the Extra Money
Paying off debt faster requires either earning more or spending less. In practice, it usually means identifying where money is currently leaking without delivering real value — and redirecting it.
In the Irish context, some of the most common places I find financial leakage with clients include:
Subscriptions and streaming services that are barely used — these add up quickly across a household
Lifestyle creep — spending that quietly expands to fill each salary increase
Irregular spending that derails monthly budgets — school costs, car expenses, Christmas — that was never planned for
High-rate credit card debt being serviced at the minimum while savings sit in a low-interest account
That last point is worth dwelling on. Many people in Ireland carry credit card debt at 20%+ APR while simultaneously holding savings that earn 2-3%. Mathematically, using those savings to clear the credit card debt (and keeping a smaller emergency fund) is almost always the better decision — but it requires getting comfortable with having less in the savings account. Coaching helps with that conversation.
Step 4: Build the Structure That Prevents Relapse
Getting out of debt is one thing. Staying out of debt is another.
The most common pattern I see is this: someone works hard, pays off a significant chunk of debt, feels relieved — and then, without a new financial structure in place, slowly drifts back into the same habits. The credit card reappears. The loan is back within a year.
What prevents this is not willpower. It is structure.
That means building a monthly money routine that you actually follow. Setting aside money for irregular costs so they do not derail your budget. Creating a genuine emergency fund — ideally three to six months of essential expenses — so that unexpected events do not trigger new debt. And building the kind of automated financial systems that mean progress happens by default rather than by constant effortful decision-making.
When Debt Is More Serious: Know Your Options in Ireland
For most people reading this blog, debt is a manageable structural problem — not a crisis. But I want to briefly acknowledge that for some people, the situation is more serious.
If you are genuinely struggling to meet your obligations, the Money Advice and Budgeting Service (MABS) in Ireland provides free, confidential, non-judgmental advice. MABS money advisors can help you create a repayment plan, negotiate with creditors, and — if necessary — navigate the personal insolvency options available through the Insolvency Service of Ireland (ISI).
These services exist for exactly this purpose. There is no shame in using them.
For most people in a manageable debt situation, however, what they need is not crisis intervention. They need structure, a clear plan, and someone to hold them accountable to it. That is where financial coaching comes in.
The Role of Financial Coaching in Getting Out of Debt
I want to be honest about what coaching does and does not do in a debt situation.
I do not negotiate with your creditors. I do not provide legal or insolvency advice. For those services, MABS and regulated debt advisors are the right people.
What coaching does is address the behavioural and structural dimension of debt — which is where most people actually get stuck.
It is rarely the case that someone is in debt because they do not understand compound interest. They are in debt because of habits, patterns, and structural gaps in how they manage money. Because there was no plan for the irregular costs that keep arriving.
Because credit felt easier than discipline at a moment of pressure.
Coaching helps you understand those patterns, build better ones, and create the kind of financial structure that makes debt a chapter in your story — not a permanent feature of it.
You Can Do This. And You Do Not Have to Do It Alone.
Getting out of debt is not complicated. But it is challenging — because it requires sustained behaviour change over time. And sustained behaviour change is genuinely hard without structure and accountability.
If you are carrying debt right now and you feel stuck, the most important thing you can do is stop waiting for the perfect moment and take one step. That step might be creating your debt list this weekend. Or it might be booking a free call with me to talk through your situation.
Either way — start. Because the debt does not go away on its own. And neither does the stress that comes with it.
I work with clients in Galway, across Connacht, and throughout Ireland via online sessions. There is no judgment, no sales pitch, and no pressure. Just a clear conversation and a plan that actually works.
Disclaimer: Financial coaching as offered by My Financial Coach does not constitute regulated financial or debt advice. For serious debt situations, please contact MABS (mabs.ie) or the Insolvency Service of Ireland (isi.gov.ie). Sid Hegde is a Qualified Financial Advisor (QFA) through the Institute of Bankers Ireland.
Comments