7 Tips For Paying Off Your Debt Quicker

Are you getting to the middle or end of the month and finding that your paycheck isn’t stretching far enough? That could be due to one or two things - you don’t make enough money, or you have too much debt.

If the amount of debt is a reason why you can’t seem to get ahead, then you’ll want to keep reading.

(I am not a financial expert. All information is based on my own personal experience and research. This information is not meant to be financial advice and is just for educational purposes. This post includes some affiliate links. Should you click an affiliate link and make a purchase I may receive a small commission at no extra cost to you.)

What is debt?

Debt is when you owe someone else money. Meaning you borrowed money from someone or something and agreed to pay it back at a later date, typically with interest.

When people talk about debt they are typically talking about what is considered to be consumer debt which is used for the purchase or acquisition of goods for individual or household consumption. The types of debt that are consumer debt are credit cards, car loans, student loans, furniture loans, payday loans, etc.

Your mortgage is also consumer debt but that is sometimes left off the list because it’s for an appreciating asset (goes up in value) while most other debt is for depreciating assets (goes down in value).

How to pay off debt

I don’t talk about debt much because I’ve been blessed to not have much of it. My debt (not counting my mortgage) has consisted of two car loans and both of those I paid off early. The first one was a year early, and the second one I paid off in a year. One reason I know I was able to do that was because I didn’t have a bunch of additional debt that I was trying to pay at the same time.

Not having a lot of debt has allowed me more financial freedom because I have more of my paycheck each month to put in my savings account, invest, put towards retirement, and just use to enjoy life. You can have that too. I’ve scoured the web and found what I think are the top 7 tips for getting out of debt so you can be debt free.

1. Save a small emergency fund

This may sound counterintuitive but believe me, it’s a good idea. Not having an emergency fund may be part of the reason you have debt and not having an emergency fund (also sometimes called a rainy day fund) will make it so much easier to rack up more debt.

If you don’t have one already, now is a good time to save for one. This emergency fund doesn’t have to be a big one. It’s meant to help cover true emergencies while you’re paying off debt so it can be anywhere from $1,000 - $2,000 or whatever you feel comfortable with. Just know that the more you try to save the longer you may be putting off paying your debt off.

2. Create a budget

This is important to do before you start tackling your debt because it puts your full financial situation into perspective. Having a budget will help you see where your money is being spent, where you can cut back to allocate more money towards your debt, or if you need to bring in extra income.

Plus, it also helps you be more disciplined with your payments and know when you have a little extra that you throw toward your debt repayment.

3. Gather all of your debt

Go and compile all of the information for your debt
  • How much debt you have
  • Who you owe it to
  • Loan maturity dates
  • Payment dates

Do this for all of your consumer debt which is any debt that isn’t your mortgage. If you’re married this is all of the debt racked up by you and your spouse before and after marriage.

By having all of your debt info in one place you can see the full picture and use it in conjunction with your budget to create a game plan for paying off your debt.

There are a few apps you can use to hold all of this info like the Debt Payoff Planner & Tracker and You Need a Budget (YNAB). Or you can put it all in a trusty Excel Spreadsheet or Google Sheets.

4. Stop creating new debt

This is kinda a no-brainer but it can be easily overlooked. If you’re so used to taking on debt, especially credit card debt, you may do it without even thinking twice.

A good part of not creating any new debt is changing your mindset and eliminating the temptation
  • Make up your mind that no matter what you won’t incur any new debt
  • Cancel credit cards and cut them up
  • Unsubscribe from retailer emails to get rid of the temptation to take advantage of a “great sale”
  • Stop following retailers on social media

5. Determine your debt payment method

In addition to knowing how much debt you have and what money you have to put towards it, you’ll want to figure out how you’re going to pay it off. You may be thinking “I just put extra payments toward it right?” Yes, and no. You’ll want to be more strategic and thoughtful about it as you want to make sure you’re making progress and not just hitting minimum payments on everything which will get you nowhere.

There are a few different debt repayment methods you can use to pay off your debt. Here are the two I see talked about most often.
  • Debt Avalanche or Debt Stacking: With this method, you pay off the debt in order of highest interest rate to lowest.
  • Debt Snowball Method: With this method, you pay off your debt from smallest to largest regardless of the interest rate. This is what’s used in the Ramsey Baby Steps

There’s no right or wrong method, it’s really about what will work for you. Which do you feel more comfortable with? Which will work best for your situation? This article from Investopedia breaks down the Avalanche/Stacking and Snowball methods and provides a good view of the pros and cons of both methods.

6. Pay more than the minimum payment

Paying just the minimum payment will not get you out of debt because most of the payment is made up of interest. If you’re

really serious about getting out of debt you need to make larger and perhaps even more frequent debt payments.

The key here is when you make an extra payment you direct the lender to apply it to the principal. Otherwise, they’ll apply it to the interest which is more money for them and your debt isn’t getting paid down any faster. I had this happen with my first car loan. I quickly learned that I had to tell them where to apply the extra payments.

7. Make more money

If you’ve looked at your budget and can’t find anywhere to get money to make extra payments then you’ll need to make more money. If you can make good extra payments, making more money can help speed up the process.

Here are some ways you can increase your income giving you a bigger amount to put towards debt repayment: 
  • Find a better job that pays more or ask for a raise
  • Get 2nd or 3rd job or work extra shifts
  • Sell some items around the house to make some quick cash
  • Trade down in car or trading down in housing by getting a smaller/cheaper apartment to decrease expenses

You can also find ways to decrease expenses in your budget by
  • Couponing 
  • Grocery shopping with a list
  • Using rebate sites when shopping for necessities
  • Earning gift cards through rewards or survey apps
  • Cutting cable out or lowering your package
  • Canceling streaming services
  • Downgrading your Internet and cell service
  • Going less often to the hair or nail salon or stop going altogether

free debt payoff tracker printable from a relaxed gal.


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