See how one reader paid off over $78,000 in debt within two years and the seven debt payoff strategies that work
Debt is a hard pill to swallow. What started as a way to help the middle class afford big purchases or get ahead in life has snowballed into $12.58 trillion in household debt for Americans. Debt isn’t helping most people get ahead; instead, it’s holding them back from buying houses, taking their vacation days and saving for retirement.
This year my husband and I finished paying off $78,000 of debt after two years of frugal living and lots of hard work. People are amazed at how fast we did it. I tell them we weren’t living under a rock, but we also haven’t seen my husband’s paychecks since we got married.
Paying off debt can sound impossible — especially when you’re pushing six figures of it — but it’s doable. In fact, it’s not just doable — it can be done fast. Here are some of the best tips I’ve learned to help pay off debt faster and take back control of your finances.
Determine Your “Why” to Paying Off Debt
It sounds like such a small inconsequential step, but it’s the first thing you have to do when you decide to pay off debt. No matter how much progress you’re making, there are going to come times when you want to give up. It’s in those moments that your “why” is going to keep you motivated.
Write it down on paper, make a collage or paint a picture — just do something to remind you of your deeper reason for paying off debt.
Design a Budget That Works for You
There’s no right way to budget; you just have to find a method you can maintain long-term. It can be as simple as creating a spreadsheet in Google Sheets, using a budgeting app or using a structured and guided tool like You Need A Budget.
Examine your spending habits and decide which one is right for you.
There are also a lot of budget tricks you can use to stick to your budget. My favorite method is paying bills and debts first and then spending whatever’s left. It makes me feel less restricted by a budget but still allows me to stick to it.
Learn to Save and Avoid Debt
It takes time to learn the savings ropes, but it’s well worth the investment. After you make your budget, look at all the things you’re going to spend money on and research how to save money on them.
From groceries and gas to car insurance and internet, look at each of your expenses and figure out how you can save on them.
Get an Extra Job
Paying off debt can be done on any income, but, in order to pay it off fast, you sometimes just need more money. Dog sitting, Airbnb, virtual assisting and customer service are legitimate ways to work at home and make money fast.
You can also do something fun outside of the home. One of my friends spent the summer working at an escape room and was able to pay off her car with the extra income.
Another great thing about working extra hours is that doing so leaves you with less time to spend money: working Friday and Saturday nights isn’t very fun, but it’s a great way to help you stay under budget.
Make Weekly Payments on Your Debt
While paying off debt my husband and I made student loan payments every Friday or at least every other week. That way our paychecks weren’t burning a hole in our pockets for the weekend, and we were sure to make our debt payment goal each month.
If your debt is a mortgage, making a half payment every other week instead of once a month can save you years and tens of thousands of dollars in payments. Even if the amounts are small, you’ll pay it off faster the more often you pay.
Eat at Home
The biggest budget buster for most people is dining out. Committing to eating only home-cooked meals (or at least whenever possible) for two to three years can make a huge dent in your debt repayment and savings.
Set yourself up for success by meal planning and shopping on the weekends. Chop and prep your food for the week in one go so you can easily make each meal with minimal effort. Freeze soups and stews for crockpot meals and have protein or snack bars on hand to hold you over until dinner’s ready.
Traveling used to be reserved for hippies and the high falutin. These days you’re not living if you’re not flying to Europe once a year. The memories and experiences you gain from traveling are priceless, but I can tell you that they can’t compare to the feeling of being debt-free.
You don’t have to stay cooped up at home the whole time you’re paying off debt. While paying off our debt, my husband and I took a cheap weekend getaway twice a year. All our trips combined cost about two weeks worth of debt payments.
Even if you don’t do all of these suggestions, doing one or two will put you ahead of most people. Start small and work up to pay off debt faster than you ever imagined. You can so do this.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.