Debt Reduction Strategy: The Debt Siege

In honor of The Debt Movement, an effort for consumers to join forces to pay off $10 million in debt over the course of 90 days, I’d like to talk about one of the debt reduction strategies known as the siege.

It’s true that the debt siege won’t get you out of debt really quickly, but it can help you feel better about paying down your debt, and it can help you keep the whole process manageable.

The Debt Siege

When you think of a siege, the first thing that comes to mind is slowly wearing down your opponent. The debt siege can be thought of the same way: You are slowly wearing down your debt. The idea is to keep doggedly at your debt until you pay it off, no matter how long it takes.

The debt siege is accomplished by following these steps:

  1. Add up your monthly income.
  2. Determine your monthly expenses.
  3. Decide which expenses you can cut. Realize, though, that experts estimate that an average household wastes between 10% and 15% of its monthly income. That can help you identify how much waste you should be trimming.
  4. Trim the fat from your budget, and put that money toward paying down debt each month.
  5. Make sure that your debt pay down money is factored into your budget as an expense, and keep paying it each month.

You can order your debts according to the “debt snowball” method (smaller debts paid off first) or the “debt avalanche” method (higher interest paid off first), or you can even just pay toward whatever debts you want with no method — although a plan can help you pay off your debts more efficiently.

The point of the debt siege is to make paying off your debt manageable over time. It doesn’t require any huge changes or sacrifices. As a result, you have to be prepared to pay more in interest during the course of your pay down efforts. You can increase the effectiveness of your debt siege, though, by looking for ways to earn extra money to put toward the effort. That way, you can breach the walls and defeat your enemy a little quicker.

Who the Debt Siege is For

The debt siege is most effective for those who don’t feel that it’s practical to take extreme measures to pay down debt. If you have teenage children, it might not make sense in your situation to sell everything and deny yourself any pleasures until the debt is gone. The debt siege is a fairly gentle approach to debt pay down. It’s effective in the long-run, but you have to be willing to accept that you will pay more in interest, and that it might take you five to seven years, instead of three to five.

Another scenario in which the debt siege works well is if you and your life partner have differing views of the urgency of the situation. If you want to pay off your debt, but your family isn’t on board paying debt or making huge sacrifices, then the debt siege can make a great compromise. You can make progress in paying off your debt, without totally discomfiting your life partner.

Look at your situation and get started. Even though the debt siege might not be the fastest and most efficient way to pay off debt, the fact of the matter is that it is progress. It’s a way to make sure that you are at least making some effort to pay down debt, and that you will eventually emerge victorious.

What do you think of the debt siege? Would it work in your situation? Or does it not go far enough?

About the Author

By , on Jan 15, 2013
Miranda is a freelance writer and professional blogger, specializing in financial topics. She has written for a number of financial web sites, and her work has been linked to by many publications, online and off. Miranda's blog is Planting Money Seeds.

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  1. Personally, I don’t care about the psychological effects of paying off debt so I don’t like the snowball method at all. It’s much more effective to just pay off your debt IMO but then again I’ve never been in debt so I probably don’t know what i’m talking about..

  2. I think everyone could use a little of this to straighten out their finances.

  3. Jamie Dickinson says:

    Great analogy. Little by little, with a plan, we’ll get there. Denying yourself everything is a sure fired way of falling of! Thanks

  4. Laurie says:

    Miranda, great post! I like the debt siege technique in that it’s flexible enough that it can fit a variety of families and situations. I’ve got a friend who’s in the situation that you talked about where her husband isn’t on board about going frugal. This is the perfect plan for them. Can’t wait to share this post with her!

  5. Pauline says:

    I am much more aggressive with my debt but I think the debt siege, like a slow weight loss, will work for most people. Very drastic changes can make people biter and resentful whereas a slow and steady change will work over time.

  6. We moved home recently so I saw it as an opportunity to look at our expenses and see if there was anything we could cut back on or even eliminate. Firstly I noticed a couple of small insurance payments that I didn’t really need anymore so I cancelled those. Another saving we made was to reduce our tv, phone and broadband package. It’s amazing how much all these little cut backs can add up!

  7. The question to ask is what is “waste” What is wasteful spending to one may be important to others. I will keep my tv subscription even if it means $600 per year less for paying off debt. I ran the mouth and it extends my current debt repayment plan by 8 months.

    • Miranda says:

      Yes. Since Personal Finance is “personal” it’s up to you to decide what constitutes waste. In my mind, it’s about what you value, and what you decide is important. “Waste” is anything that you’re spending money on that you don’t actually think is important. Since you like your subscriptions, you can figure out what you might be spending your money on that ISN’T important to you (I used subscriptions in my example because I realized I wasn’t using them, but I was still paying for them). Then, cut out the unimportant spending and use that money to pay down debt.

  8. I think the siege is a good plan for those that don’t want to take the necessary measures and evaluate their entire spending issue. It is better than nothing, but it could take a long time to pay off the debt, allowing them to pay a lot in unnecessary interest.

  9. I like this plan. I personally don’t like taking drastic approaches to anything so slow and steady is best for me.

  10. I agree with the other comments–anything is better than nothing. For me, I’m unmarried and have no children so I favor a more aggressive approach to debt payoff.

  11. Eddie says:

    Any action is better than none. Far too many people just sit and don’t take action. In my opinion, whatever action you take should be right for you, where you’re comfortable.

  12. AverageJoe says:

    Great stuff, Miranda. It’s a tradeoff….more life today while you slowly work your way out of debt, vs. hammering it now while you live in a tent! I’d be happy if the gov’t could agree on even THIS approach to debt 😉

    • Miranda says:

      🙂 It always seems to come down to a trade off in finances. You have to give something up in order to get something, whether you give up time, or you replace something less important for something more important.

  13. Matt says:

    It’s a good idea, and some people with low incomes may not have any choice in the matter.
    A good thing to do with this method, is to keep a record of how much better off you are each month, as looking at your progress like that show that you ARE actually making progress, giving you the motivation to stick to it.

    • Miranda says:

      I like this idea of recognizing that you are better off each month as your debt goes down a little bit. It keeps you motivated and (hopefully) on track.

  14. I would agree with Holly, any strategy is better than nothing, especially when it comes to debt repayment. I tend to be more on the extreme side though, in regards to debt repayment, and would look for pretty much anyway to get them knocked out as fast as possible.

  15. Great post! I agree, this is better than nothing. Hopefully with the “siege”, one becomes motivated a little more over time once they see their debt going down.

    • Miranda says:

      I think that’s a good point. As you start to see the debt reduced, you might be encouraged to make better efforts. Eventually, you might attack the debt with greater vigor, speeding up the siege.

  16. I think that any kind of debt repayment plan is better than not doing one at all. I tend to take drastic measures to achieve my goals but I also realize that other people would like to take a less painful route. There is nothing wrong with that.

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