7 Tips To Pay Off Debt Quicker

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This is a guest post from Careful Cents.

Is debt the bane of your existence? Does it keep you up at night? Does it feel like you’ll never stop owing money?

Then, it’s time to make an active effort to pay off your debt.

We all have it, we all hate it, so it’s time to do something about it.

Here are 7 tips to pay off debt quicker, whether it’s by scrimping, budgeting more effectively, or simply supplementing your income.

1. It’s time for a budget

Is it an obvious tip? Absolutely.

But that doesn’t change the fact that this is a really important aspect of your journey towards paying off debt as quickly as possible.

There are two main ways to cover your expenses in a more efficient way: make more money, or reduce your expenses, and we’re talking about the latter, here.

Why is this effective?

Budgeting is a very effective method to save money and use it towards your debt because it forces you to limit your spending in a conscious way.

When you’ve got a budget, the money is no longer unlimited, and you are forced to think about what you are spending, how much, and on what.

It forces you to ask questions like “Do I need this?”, “Do I actually want this?”, and “Can I find this cheaper anywhere?”.

How do you do it?

There are many ways to budget, but the most basic way is still the old-fashioned one.

Just sit down with pen and paper and do the math on how much money you actually need in a week or month for your necessary expenses – that is your minimal budget.

From there, you can give yourself small allowances for “wants”, but either way, there should be enough left over to help you make a dent into that debt amount.

Editor’s Note: I personally use, and love, an app called You Need a Budget and I think you will too! Sign up for YNAB through my link and you’ll get an additional 30 days free once you subscribe. This is in addition to the 34-day trial! Check it out! I love the app and use it daily.

2. Get a debt consolidation loan

It seems counterproductive, right? Get a loan to get rid of loans? How does that work?

But hear me out for a second – this will make sense.

Debt consolidation loans are larger loans that consolidate your debt. That is to say, they enable you to get rid of all your different loans and other debt sources by paying those off and just having one loan – like streamlining.

Why is this effective?

Still not seeing the value in this move?

Debt consolidation loans typically come with a lower interest rate than you had before, or they enable you to reduce the amount of debt you’ve got.

They can also allow you to simply renegotiate the monthly installment you pay, whether you want to pay less per month, for affordability, or you want to increase the amount so that you can get rid of it quicker.

How do you do it?

First thing’s first – you should be aware of all the debt you have and where, and what your interest rates are, how much you’ve paid off, how much you’ve got left, etc.

Then, you can start looking for offers on debt consolidation loans and compare to see which one is the best deal for your needs.

3. Prioritize high-interest debt

If a debt consolidation loan doesn’t work out for you, this is a good idea, either way: when you’ve got multiple sources of debt and loans, focus your efforts on paying off high-interest debt first, before anything else.

Why is this effective?

When you are saddled with high-interest debt, sometimes it feels like no matter how much you pay and for how long, it will just never end.

And you’re not wrong – the more it goes on, the more debt you acquire, and at a fast pace.

By prioritizing it and aggressively paying it off to get rid of it, you are actually saving a lot of money in the long run, because you are preventing all that interest from building up. Paying everything else off afterward will be a breeze.

How do you do it?

It’s always a good idea to have a talk with your lenders and see where you stand and what your options are when it comes to repayment. Perhaps you can set up some modified payment schedules that allow you to focus on the high-interest debt, for now.

4. Increase the monthly payment amount

It’s basic, but it’s worth mentioning either way – you don’t have to stick to the monthly payment you started with if you don’t get charged for paying extra.

Depending on how your contract is drawn up, you may be able to pay off the loan early or pay larger installments in order to save on all the interest they’d end up charging you, otherwise.

Why is this effective?

First, this is a great method because it reaches the goal we set out to achieve – it helps you pay off debt quicker because you are paying more at a time, thus successfully cutting down on the loan period.

Secondly, this actually reduces the debt amount, because paying early also means you are paying less interest.

How do you do it?

Now, this is very much going to depend on the loan itself, on the institution, and what kind of contract you’ve signed.

But a lot of deals leave you some wiggle room when it comes to this, so it’s totally worth setting a meeting with your lender and having a conversation about what you can do to pay more off.

5. Get a side gig/online job

Of course, the counterpart to reducing expenses is to just make more money by supplementing your income somehow.

Plenty of people get a second job when they’re trying to meet a financial goal, save for something special, or just make ends meet.

Service and retail jobs are traditional sources of additional income, but nowadays, it’s easier, more convenient, and often better paid to find online jobs that suit you.

Why is this effective?

Getting a part-time job or side gig online is, by far, the best option, because of a few different benefits:

  • These jobs can be done from home, so it’s cheap and convenient
  • They can be done by almost anybody, as most of them are entry-level gigs, whether we’re talking about translation work, gig jobs, or ecommerce jobs
  • The hours are flexible, and usually completely up to you, as you are in control of the hours you work and the projects you take on

How do you do it?

Working online is easier than ever, and you’ve got multiple avenues for it.

There are platforms like Upwork or Fiverr that are focused on the gig economy, or even platforms like remote.com that facilitate the link between companies and people looking to work remotely, so you get some extra cash that you can put towards your debt.

6. Track your expenses

Do you have any idea how much you spend? And on what?

Not being aware of your expenses can lead to spending way too much money, indiscriminately, on things you don’t even need.

You can curb impulse purchases and a lot of purchases you don’t even realize you make through a simple method: tracking your expenses.

Why is this effective?

This method relies on awareness of your expenses, but the most effective part of it is the horror you feel when you finally look at how much you spend in a week or month, and how much of that is stuff you just really don’t need or want.

You spent how much on Starbucks last week? You overspend every time you go out to X and Y bar? Well, now you’re aware of these behaviors, which means you can effectively change them.

How do you do it?

There are several methods you can apply – you can either do the math with pen and paper, you can keep a spreadsheet on your computer, or you can have it done automatically – and even in real time – by using an app.

That can show you how you use your credit card and where, for an even more accurate illustration of your spending habits. Once you’re aware of how much money you’re wasting, at least some of it will be going towards paying off debt, instead.

7. Follow a saving technique

Some of us can’t save worth a damn, so we also can’t pay off debt, if there’s nothing leftover.

That’s why there are solutions to a lack of self-control. It’s not about deprivation, but about forcing yourself to be a bit more disciplined for a greater goal, such as getting rid of debt.

Why is this effective?

These methods are effective because they give you a bit of structure and impose some limits on your spending, where you can’t do it yourself.

You draw a hard line and only allow yourself to spend a certain amount, but these methods also allow for a bit of indulgence and minimal frivolous spending, because you are less likely to want to massively overspend on “wants” when you’ve already built in a budget for that.

How do you do it?

There are numerous popular saving and budgeting methods out there; here are just a couple of the most well-known ones:

  • The envelope method – the concept is simple: you make different budgets for different needs (groceries, transportation, leisure, rent, etc.) and put the money in different envelopes. When the money is gone, it’s gone, and you’re not allowed to dip into a different envelope. You can do this with physical envelopes, or you can use an app that follows the same basic concept.
  • The 50/30/20 method – this one is even more pared down: 50% of your budget goes to necessities (rent, groceries, transportation, etc.), 30% goes to leisure, travel, and “wants”, and 20% goes to savings. This is great because the savings component is built-in, so you don’t have to make an effort to make an allowance for this money.

Final Thoughts

Debt can be extremely draining, so finding a way to pay it off quicker is a relief.

Take a look at these methods and try them out to see which one works best for you.

Not all methods will be suited to every person and every kind of debt, but it’s worth taking them all into consideration. In the end, the weight you feel lifting off your shoulders when you’re debt-free is worth all the effort.

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Hey! I'm Tim.

I’m an expert budgeter, author, and Certified Financial Coach. My mission is to not only teach you money principles, but to teach you how to mold them to fit who you are and build the life you want. I don’t like typical money advice. I’ve tried to fit into a mold by using typical money advice and I had less control of my money and went further into unnecessary debt. Now, I live to teach others how to break the mold in their own lives and find their version of financial freedom. Read more about me.

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  • Budgeting principles from the five best budgeting methods
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  • BONUS: Case Study of what budgeting principles I implemented in my own budget (and how!)

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