How to Get Out of Debt Using the Pyramid Method

Having too much debt can drain the monthly budget and can take years to pay off. Credit card companies are savvy at enticing customers to "buy now, pay later." Sometimes bills pile up that are beyond our control, such as doctor's bills or auto repairs. By using the pyramid method to get out of debt, you can get out of debt quicker, without straining the monthly budget.

How to Get Out of Debt Using the Pyramid Method

Make three columns on a piece of paper in your notebook. In the first column, make a list of all creditors from the smallest balance to the largest. In the second column, write down the minimum monthly payment. In the third column, write the total balance due. Your list might look like this:

Dr. Jones---$10 mo.----------$340 Mervyns-----$15 mo.----------$472 Sears--------$56 mo.----------$4200
Visa----------$150 mo.--------$7500

Compare your debt to a pyramid. The smallest debt is at the top and the largest is at the bottom. To get rid of debt using the pyramid method, we will begin at the top, or in other words, with the smallest debt. Pay as much as you can toward the debt with the smallest balance, while only making minimum payments to the remaining creditors. If we use the example from above, our first month of payments might look like this:

Dr. Jones: paid $40 ($10 minimum payment, plus $30 extra) Mervyns: paid $15 Sears: paid $56 Visa: paid $150

Continue as above until the debt with the smallest balance is paid off.

Now, take the total monthly amount you were paying from the first debt and apply it to the next debt with the smallest balance, include the minimum payment that you have been paying for that bill. Continue to make minimum payments on the remaining bills.

Dr Jones: paid in full Mervyns: paid $55 ($40 from the first bill, plus the $15 minimum payment) Sears: paid $56 Visa: paid $150

When the second bill is paid in full, apply the full amount of the monthly amount to the next bill on the list.

Dr. Jones: paid in full Mervyns: paid in full Sears: paid $111 ($55 plus $56) Visa: paid $150

Continue as above until all bills are paid in full.


  • Cut up all credit cards, except for one or two for emergency use only.

    Seal up emergency credit card in an envelope to prevent impulse credit card use.


About the Author

Melissa Bone started freelance writing in 2007 and enjoys writing about natural health, parenting, homeschooling, frugal living and creative ideas. She has been published in "Secular Homeschooling" magazine and "Family Fun" magazine, as well as numerous online sites. Bone attended the University of Utah.