The average american is in over $15,000 in debt and that’s not including their student loans, car loans, or mortgage! Can you believe that?! Wow, that blows our mind. People tend to think that being in debt is the norm but let us tell you, it is not! It’s time to take these chains off from debt and it’s time to break free! Let’s stop living paycheck to paycheck and lets put a plan in place to pay off all your debt! Are you ready to do that? Let’s end the cycle of being broke at the end of every month and take back control of your money! Are you ready to kill the debt you currently have fast? We promise you it can be done and there are ways to do it. Are you ready to hear them? Here’s how to kill debt fast in 7 proven ways:
1.)Find your “why”
Have you ever just thought to yourself and said “I’ve had enough!”? We had this moment, especially paying everything we worked so hard for to the debt of the past. We actually found our “why” when we realized that we are just working just to buy more things, that we don’t need. Not only that, we discovered, when we are truly out of debt, we can have more freedom to do the things that we really want to do like be with our children more, volunteer, send our kids off to college without them taking out student loans, retiring early, take more vacations, give more freely, and just be our true selves. That’s our “why”. But what’s yours?
Did you know when you’re out of debt, you are your true self because you are not stressed all the time when it comes to money? Though sometimes, when you’re on the momentum of paying off debt, it can be so hard to get motivated and on board with killing the debt. Sacrificing everything from not going out to eat, saying no to friends when they want to go out, no vacations, working extra shifts and over time, but the most important is understand why you want to kill debt in the first place! It’s all because of your “why”.
2.) Change your habits
You ask yourself all the time, “if only I can make more money, only then all our financial problems will go away and I can get out of this debt that we’re in.” You are absolutely WRONG! We hate to say this to you, but if you can’t manage $1,000, how are you going to manage more money?
Believe it or not, the more money people make, the more money they spend. This is a known fact. Your lifestyle only increases and you tend to buy and finance more, expensive things! The more money that flows into your household means more money to burn. No matter how much money you make, you have to learn how to control how you treat your money and how you spend it. This all starts with changing your habits and changing your mindset and behavior. Get in the habit of budgeting every month. Your behavior and habits needs to change in order to go in the direction of achieving your goal of being debt free.
Here are some money habits that can go:
- Eating out
- Unused subscriptions
- High interest credit cards
- Happy hour/Going out to party
- Coffee runs
3.) Get rid of those credit cards
Cut up those “trouble” cards. This is what is making you fall victim into debt. Using credit cards as a savings account or an emergency fund is not smart. Think about it, people rely on their credit card when they are in a bind. For example, you had an emergency when all four of your tires needs to be replaced, (this actually happened to one of us and because all four of the tires were completely bald, all the tires had to be replaced at the same time and the price of all four tires were no joke!!) and the bill came out to $600. You decide to use your credit card because you did not have ANYTHING in your savings to cover the emergency.
You put the $600 on your credit card with a high interest rate (yikes!). Then, another emergency hits, you broke your tooth and you’re in so much pain that you have to fix it right away. To fix it, it will cost you $400, so you put it on the credit card. You get frustrated and you keep adding to the debt because you didn’t have an emergency fund. The cycle repeats itself and now you feel yourself digging a deeper hole into debt. Do yourself a favor and cut up those credit cards! They are not for emergencies and they’re absolutely not used to buy more things that you can’t afford.
4.) Use the debt snowball or avalanche method.
Have you even heard of these methods? The debt snowball method is a debt reduction strategy, whereby one who owes on more than one account pays off the accounts starting with the smallest balance first, while paying the minimum payment on larger debts. Include any type of debt that you may have, student loan, car loan, credit card, medical bills and if you want to be extra bold, you can even include your mortgage if you like!
Basically how the debt snowball works is:
- Add up all debt smallest to largest
- Continue making minimum payments on all other debt
- Extra money that you earn goes to the smallest debt
- When the smallest debt is all paid off in full, add that payment to the next debt (including that extra amount that you were paying to the smallest) and apply that payment to the next
- And repeat
The avalanche method is similar but the only difference is listing the debt from the highest interest rate to the smallest. Personally, we love the debt snowball because we love to feel that we are tackling the debt quicker!
5.) Work, work, work, work, work!
Like Rihanna says, you have to work! Make extra money! Ask for a raise, do overtime, pick up a side hustle, we have a post called “50 Sides Hustles You Can Start Today” that you can implement to throw at your debt. Remember what your why is! You have to be able to sacrifice just a little to get a lot in rewards for your future. The goal is to be free from chains of debt. How bad do you want it?! Put in that work!
6.) Have a budget and a plan
This is a sure way to kill your debt fast. You have to put a plan in place and you have to execute on it! Nothing is effective without a plan and a budget. Budgeting is not hard at all, you just have to put in the work to see results. There are so many ways to budget. There are also apps that can help keep track of your spending. Always stick to your budget! Especially, when you’re trying to pay off debt fast! Any money that you did not use for the month’s budget, roll it into the debt you were making payments on.
7.) Factor in selling your house or downsizing your apartment for lower rent payments
In most cases, this may be the best decision for you. Especially, if you have a ton of equity in your home, this option is a good way to start on a clean slate. Most of the time, the home you purchased is a lot more than you can afford anyway. You can also use the money that is left over from the sell of the home for a down payment for the next home so this is a great option you can consider.
If your rent is way expensive, you can also downsize to an apartment that has lower rent. Why not share a space with a friend? These are all options to help kill your debt fast!
Have a goal, aim high and kill that debt immediately! You have to sacrifice today to reap the rewards later. It will be so worth it in the end, we promise! Hope you enjoyed all the ways to pay your debt of fast! Let us know in the comments what you think and be sure to subscribe for more posts from us!