We all have debt at different points in our lives. When we were studying, many of us took out student loans. We use loans to buy cars, mortgages to buy houses, credit cards for convenience and lines of credit to bridge cash flow gaps. With so many different debts, it’s easy to lose track of the costs to our disposable income — our ability to invest and our future lifestyle.

The good news is that it’s often possible to manage debt much more efficiently. Start freeing up your money for other goals with these three debt reduction strategies.

1. Tackle highest-rate debt first

Chances are you’re paying down multiple debts at a time — mortgage, credit cards, department store cards, car loans, and so on. While you need to maintain minimum payments to avoid charges and late fees, you can be strategic by focusing extra payments on the debt that has the highest interest rate first. Paying down a debt that costs 8% is the equivalent of earning an 8% return on investment.

2. Make repayments automatic

Sometimes the most obvious strategies are overlooked — such as setting up regular payments to reduce debt. Automating debt payments integrates them into your budget and ensures that you make steady progress towards your debt reduction objectives.

3. Consolidate to lower rates

A poll conducted by a major Canadian financial institution found that almost half of Canadian households have credit card debt.1 Further, some credit cards charge interest rates of 20% or more, which is a significant drain on your resources. To reduce your interest costs, consider using a lower-rate secured line of credit to pay down any outstanding balance on your credit cards. At a lower rate, your payments will reduce the balance more quickly.

With debt as with investing, it’s not an all or nothing proposition. Every dollar in debt you chip off puts you in a stronger financial position — today and in the future