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That title is SOO clickbaity and made me roll my eyes a little bit so please forgive me but I have received SO this exact question in my question box on Instagram SO many times.
“How can I pay off debt as fast as possible”
There is so much shame carried with having debt sometimes that it can feel like we just want it gone so we can let go of the shame. But paying off debt can give you so many freedoms and choices. The choice to leave a bad marriage. Bad job. Bad situation in general. It can give you the option to donate to causes you are passionate about and help others! It can give you freedom!
I have said this a few times, the formula is simple but that actual application isn’t always easy. Getting into debt didn’t happen in one day and paying it off isn’t going to happen in one either.
Here is the very basics of paying off debt:
1) Lower your expenses as much as you can
This is obviously easier said than done and it depends on the season of life that you are in. This starts with creating a budget and figuring out what your monthly expenses are. Figuring out where your money is going and looking at each line item is a great place to start when lowering your expenses.
This can be lowering your bills like switching to cheaper phone, internet, or insurance. It can be adjusting your spending in different categories or finding a few ways to cut out categories completely.
I created the 7 Day Money Reset to take you step by step through where your money is going now, where it needs to go and creating a budget in 7 steps! You can grab it here!
2) Increase your income
Unfortunately, you will find that there is a limit to decreasing your expenses. At some point, you are as bare bones as you can get and you still need more wiggle room. Increasing your income is the next step.
Depending on your goals, this might be a short term increase like Doordashing, a part time job, or another side hustle. It can also be starting your own side hustle like selling something you make or a skill that you have. This depends on what season of life you are in.
Some of my favorite side hustles have been social media help, bartending, and a few others. I have a list of the ways that I made extra income early on in my debt free journey.
3) Put the difference towards your smallest debt until it is paid off.
I LOVE the debt snowball. Specifically because it is the easiest way to feel the momentum quickly with paying off the first debt! When you start creating wiggle room in your budget between lowering your expenses and increasing your income, you will have money to throw at that smallest debt. When that one is paid off, tackle the next one. And the next one!
It feels so slow at first, but once you get to the last, biggest debt you are throwing bigger chunks of money towards it and seeing that balance decrease a lot more!
A few more tips that have helped keep me going:
Like I said, the formula is simple but that actual application isn’t always easy. It can take a lot of focused priorities and delayed gratification.
- I love these debt trackers to color in as I go to track my progress
- I love this debt letter board, also to track my progress, but changing it is so exciting.
- Tracking my spending using this No Spend Tracker helps me see my money habits.
- Have an emergency fund that helps to keep you from going back into debt.
- Find people who are also working on their goals to cheer you on and share your wins– That is why I founded The Savvy Savers, a community of people on a budget to share the ups and downs with! This community has weekly meetings to chat about money and ask questions plus I am bringing in other experts to talk about money related topics!
