No matter how much debt you’ve found yourself in, it can seriously affect your emotional and physical happiness and wellbeing—and squash your financial dreams for the short and long term. To get you back to a financially good place, the best strategy is to pay off your debt quickly and avoid compounding interest payments.
Here are 15 easy-to-follow strategies to pay off your debt as quickly as possible.
15 ways to pay off your debt faster
1. Stop using your credit cards
The more you spend on your credit cards, the more money and interest you’ll owe for longer. If you think of your current money situation like a sinking boat, the fastest way to solve the problem is to plug the holes. The same goes for your money and spending. The fastest way to get out of debt is to stop spending.
2. Make a plan and hold yourself accountable to it
To stop spending entirely is not realistic, however, you can get on top of your spending. Look at your monthly spending over the last year. Get a picture of where your money is coming from and where it’s going. Then make a plan for how to cut spending and use that extra cash to pay off debt. Lastly, hold yourself accountable until you’re out of debt (and try to stay there).
3. Pay off more than the monthly minimum payments
Anytime you get paid, set aside the largest sum possible and use it to pay off your debt. This is where your budget and planning come into play. Ensure that you have enough to pay off bills and life’s essentials and use the rest to pay off more than just the monthly minimums. The larger the payment, the quicker you’ll get out of debt.
4.Pay off debt bimonthly
Cadence for debt repayment is just as important as the dollar amount you pay off. If you can afford to pay off your debt bimonthly, rather than monthly, you’ll start to counteract the effects of compounding interest.
5. Consolidate your debt
Rather than having multiple credit cards and loans with varying interest rates and monthly payment due dates, consolidating your debt helps keep it all together. Here is a blog post we wrote on how—and when—to consolidate your debt.
6.Tackle high-interest rate debts first
If you have multiple debts, tackle your high-interest rate debts first. Interest adds up quickly and can compound your debt, making it harder and longer to get out.
7. Pick up freelance side gigs
Your debt, cost of living, and general lifestyle may cost more than your income. If you think it’s time to get a side hustle, consider picking up freelance gigs and get creative with ways to make extra cash.
8. Cut frivolous spending
This is an essential part of getting out of debt. Get an understanding of where your income is going, add up how much you’re spending on nice-to-have things like coffees, shopping, trips and so on, and cut spending while you’re trying to pay off your debt fast.
9. Lessen your monthly bills
Find creative ways to lessen your monthly bills, such as sharing WiFi, getting roommates, and cutting extra monthly expenses such as nice-to-have gym classes and social activities.
10. Leave emergency savings
Set money aside for both paying off your debt now and saving for emergencies and the future. Having savings to rely on in any situation will help you get out of debt next time—and stay there.
11. Treat yourself to meeting your targets
Reward yourself as you reach each milestone along the way to getting out of debt. These little treats will act as an encouragement to pay off your debt faster.
12.Consider applying for a loan
Depending on the level of debt you’re in and your financial situation, you may require extra financial help. Consider applying for a loan with a reasonable interest rate and sustainable, healthy financial plan to help pay off your debt faster. Learn more about how Progressa loans work for you.
13. Lessen your credit card interest rates
Many credit card companies and lenders have lower interest rate and fee options. Ask your financial institutions and creditors what options they have for you. Interest adds up quickly and this could be a saving grace for paying off your debt faster.
14. Sell, sell, sell
Get creative with how to make more income by selling some of your assets, especially those material items that have accumulated in your basement. There are many great ways to make extra cash, such as throwing a garage sale, selling your crafts, doing some consulting or manual labour.
15. Seek credit counseling and debt advisors
Sometimes debt can spiral out of control and the key is to know when to seek help. There are credit counselors, debt advisors, and people who can and want to help. At Progressa, we have a discussion with every potential client about their financial health in order to find a plan that works for them.
The author Sam Milbrath
Sam Milbrath is a freelance copywriter and brand marketer. When she isn’t writing for brands or doing her own creative writing, she’s exploring, taking photographs, gardening and doing pottery. Check out her work at www.sammilbrath.com