8 Tips to Pay Off Debt Quickly
Debt can be a heavy burden, and many of us know the stress and worry that come with debts like credit card balances and student loans. But you're not alone—many people face these same challenges, and with the right approach, you can pay off your debt faster and gain financial freedom.
Below, we’ve shared 8 practical tips to help you tackle your debt quickly.
1. Create a Debt Repayment Plan
Start by listing all your debts (like each credit card balance, and any student loans) interest rates, and minimum payments. Decide on a strategy that suits you, such as the "debt snowball," where you focus on the smallest debts first, or the "debt avalanche," where you tackle the debts with the highest interest rates.
To learn more about these methods check out our free course of the basics of managing your money better. Stick to your plan and track your progress regularly.
2. Make Extra Payments
Whenever possible, make additional payments toward your debt. Even small extra payments can significantly reduce your debt over time.
Use windfalls like bonuses, tax refunds, or extra income from a side gig to boost your debt repayment efforts.
3. Cut Unnecessary Expenses
Review your budget to find areas where you can cut back on spending. Whether it's reducing takeout meals, canceling unused subscriptions, or finding free entertainment options, every dollar saved can go toward paying down your debt faster.
Take a look through your last credit card statement- you might be surprised to find a subscription you forgot about!
Also consider splitting streaming services with friends of family (my parents pays for Netflix and I pay for Disney+ and we share passwords).
4. Consolidate High-Interest Debt
If you have multiple credit cards with high interest rates, consider consolidating them into a lower-interest loan or balance transfer credit card. Head over to Google and search for “balance transfer promotions for credit cards” and you’ll likely find one that will allow you to transfer your balances to the new card and give you a new grace period with low or no interest to save you some money while you work towards paying it off. This can lower your overall interest costs and simplify your payments, helping you focus on a single monthly payment.
5. Increase Your Income
Look for opportunities to boost your income. Consider asking for a raise, working overtime, or taking on a part-time job or freelance gig. Use the extra income to make more substantial payments toward your debt, speeding up your journey to financial freedom. One example of a side gig that we love is Rover, where you can walk your neighbours' pets or pet-sit when you have some free time.
6. Automate Your Payments
Set up automatic payments for your credit cards and student loans to ensure you never miss a payment. This can help you avoid late fees and maintain a positive credit score.
Automation also ensures you're consistently making progress toward debt repayment.
7. Negotiate Lower Interest Rates
Contact your credit card company and ask if they can offer a lower interest rate. You can head over to Google and search for a “script to negotiate credit card interest rates” and you can use that when on the phone with customer support. A reduced rate can make your monthly payments more manageable and allow you to pay off your debt faster. Be polite and friendly and explain your situation—while it’s not guaranteed, many companies will reduce your rates if you ask nicely!
8. Stay Motivated and Celebrate Milestones
Paying off debt is a journey, and it's important to stay motivated. Set small milestones along the way, such as paying off a specific credit card or reaching a certain percentage of debt repaid. Celebrate these achievements, and let them inspire you to keep going. For example, I really wanted a new watch for running while paying off my student loans, so I set that as my reward once I paid off the first $5k.
Remember, it's okay if you've accumulated debt—many people have. The key is to take steps to address it and stay focused on your goals so you can overcome it and switch your focus to building wealth (don’t we all want to retire early?).
KEY TAKEAWAYS:
Determine a debt repayment strategy that works for you, whether it's the snowball or avalanche method.
Use any additional income or windfalls to make extra payments, reducing your debt faster.
Set small milestones and celebrate them to keep yourself inspired as you work toward financial freedom.
About The Authors
Amanda and Siobhan found a shared passion for personal finance shortly after completing their MBAs in 2018. Amanda excelled as a Director of Product in the tech industry, while Siobhan established herself as a leader in e-commerce before transitioning to academia as a Professor.
In 2020, they joined forces to found Hiver Academy, a platform born from their own experiences and triumphs in conquering student loans and building wealth. Realizing that financial success is within reach once the complexities are simplified, their mission now revolves around empowering individuals to achieve financial freedom.
With a wealth of knowledge and a commitment to demystifying money and investing, Amanda and Siobhan are dedicated to helping others navigate the path to success.
