Setting S.M.A.R.T financial goals and sticking to a plan are just some of the effective ways on how to pay off debt fast especially at the height of a crisis.
In crisis or in financial success, what most people and fellow investors ask is how to pay off debt fast. Debt can result from medical bills of untoward incidents, educational requirements, hosting out-of-budget grand parties or from excessive shopping splurge.
Sometimes, paying off debt goes out of hand. It can be super overwhelming, especially when you have multiple credit cards to pay, plus the daily needs and high monthly payables. Hence, it can be difficult to think of fast ways to pay off debt.
But even if it seems impossible at times, some guidelines on how to pay off debt fast is pretty useful. Each step gets you closer to your goal, and with every strategy you follow, you learn how you can take control of your finances. You also get to know how to improve your credit score and why having multiple credit cards can actually become damaging if not managed properly.
Once you apply the techniques, you'll be able to track your progress. Developing a clear and easy-to-follow plan can make you a winner in paying off your debt even faster than you think. Just make sure you stick to the plan and disciplined enough to do so.
Here are useful tips to pay off debt fast while going through a crisis.
Start with an Achievable Goal to Pay Off Debt Fast
Set an achievable smart plan to pay off your debt fast. If you're paying off high interest loans, credit cards and other types of consumer debts, it is vital to set realistic goals beforehand. It might be easy to calculate your balances, but it takes a lot of discipline to really be able to pay them off. Motivate yourself every day and stick to the plan. Track your progress.
Paying off debt should follow a proven approach for a more foreseeable success such as following the specific, measurable, attainable, relevant and timely (S.M.A.R.T.) technique. This will help you speed up your journey to completely paying off your debt and gradually shift your focus to bigger financial goals.
Pay Off Your Debt by Paying More Than the Required Balance
Make it a goal to pay more than the minimum monthly balance on your credit card statements to pay off debt fast. To pay off your debt fast, do not limit the repayment to only the minimum amount of the monthly installments. I recommend that you pay your balances as quickly as you can to save more money and give more breathing space to your budget.
Review your monthly expenses as well and look for ways to cut your costs. Track your spending for two weeks to a month so you'll get an idea how much you can spend. You'll be surprised how much money you can actually afford over things. By then you'll get a hunch on how much money you can save every month. No matter how small, every amount adds up.
Decide on Your Budget and Stick to It
If you decide on a budget and stick to it, you'll be able to figure out how much money you can allot to paying off your debt fast. Speed up your payoff timeline by having a definite amount for spendings each month. Also, make it a goal to build an emergency fund and separate it from your own savings. It will help you prevent getting into other debts when emergency comes up.
When you have a budget, you'll be able to pay all your debt sooner than you think. Take into account that every dollar counts. Think about other wants that you can give up in order to be debt-free.
Stop Overusing Your Credit Cards
A credit card is supposed to help you pay things that you need and several wants, but it doesn't mean you have to spend recklessly out of it. Having a credit card is not a privilege you can splurge on, it's still a liability and responsibility that requires you to pay promptly to avoid excess fees. Prevent your debt from growing any bigger by not overspending your credit limits.
Achieving your financial goals is all about you. Being responsible in handling your credit cards is a necessity to avoid any more penalties. If you do not add more debt while paying off your other debts, your credit utilization will eventually improve and your credit score will improve as well. The lower your credit utilization is, the better your credit score becomes.
Get Side Hustles for Extra Income to Pay Off Debt
Getting a side hustle or more can give you more money stash to pay off your debt fast. It will surely help you accelerate your payoff if you put the money in the right place and be consistent about it. Look for legitimate side hustles that won't cost you so much and something that you have expertise at.
Every person should have at least one thing they're really good about. Might as well, think about it. What are you good at? What skills can you share with others that can be profitable? Are you good at copywriting, editing videos, or making voice overs? Use it. There are many opportunities online and websites that demand those types of work.
Decide on What Payoff Method to Use
People are searching for methods on how to pay off debt fast, and it's just right, because it's a psychological and financial responsibility that you swore commitment on when you signed the papers. Just as you acquired a down payment for the things you loaned, you also have to find ways to pay that off as fast you can.
The debt snowball method is a method I recommend for those who are motivated by quick small wins. This technique encourages you to put in any extra amount you have to paying off your tiniest debt first while covering the minimum amount payable for your other debts. Once it's completely paid, use that amount of money to pay the next debt up to the largest amount until all of your debts are successful paid off.
On the other hand, if you're a person who is more into saving a bit of the money and much into delayed gratification, then I can safely recommend the debt avalanche method for you. This technique helps you focus on paying off the largest debt to the smallest one. Furthermore, using this method can save your money more and speed you up closer to your debt-free day.
Rolling multiple debts can be hard since you will still have to pay for those and having to think of your debts can be really draining at times. These “how to pay your debt fast” guidelines will help you achieve your financial goals right in time, step out of the debt zone, and finally get the freedom you have always sought for.
Read the Entire Debt Consolidation Series
- Why You Must Consolidate Debt this Year
- 10 Most Important Questions about Debt and Credit
- How to Control Debt when You Don’t Make Enough Money
- Your Complete Debt Consolidation Process
- Payoff Review for Debt Consolidation Loans [No Hidden Fees]
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.