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If you’re feeling overwhelmed by your debt, I get it. 

After graduating college with over $30,000 in student loans (plus a maxed out credit card), I’ve felt the crushing weight of debt, too. 

All of that changed when I got serious about my finances- I started with the credit card first, and was able to pay that off in about 6 months. 

I took what I learned from that experience and ended up paying off a $12,000 student loan in just 3 MONTHS. 

I’m fast on my way to being debt-free before I’m 30, and I’m so glad I started this journey when I did! 

If you want to start your own debt-free journey, trust me when I say you CAN start now- and believe me wholeheartedly when I say you’ll be thrilled that you started! 

Pull out a pen and paper and let’s start your journey together! 

List all of your debts in one place

The first step in any debt-payoff plan needs to be figuring out how much you owe. 

Make a list of every student loan, credit card, line of credit, car loan, personal loan, etc. that you have. 

You’ll want to find out the balance owing, minimum monthly payment, and interest rate for each one- this will be important later. 

Stop using credit cards

This is a hard one, but it will get you far in your journey. 

In order to get out of debt, you need to stop getting further into it. 

If you use your cards regularly, it’s time to break up with them. Cut them up or just take them out of your wallet for a while. 

Not only will this help you to get debt-free faster, but it’s also a critical step in changing your spending behaviour for good (for the better, of course!). 

Change Your spending mindset

Once you have committed to hit the brakes on credit card spending, let’s talk about your spending habits. 

Ask yourself: when you see something you want to buy, but you don’t have the money for it right this second- what do you do? 

If you’re like a lot of others (or past me!), you use your credit card. 

Without realizing it, you may be setting yourself for failure with this behaviour.

Let’s replace it with a new habit that won’t put you in debt- and still lets you buy the things you want! 

Of course, taking a break from spending money entirely is the best for your bank account. However, this approach doesn’t work for everyone. 

If you want to take a break from spending, start a no-spend challenge for 30 days– don’t spend money on anything except the necessities for 30 days. 

If you worry this isn’t possible for you, this DOES NOT mean you will fail at your debt-free journey. Another solution is to re-think how you spend your money. 

Here’s how it goes: you see something you want to buy, you add it to your shopping wish list (a list of items you want to buy and their prices), and you save up the money for it- then you buy it. This is effective because you’re not denying yourself, and you will think twice before adding the item to your wish list. Is it something you actually want to save up the money for?

Start an emergency fund

An emergency fund is a savings account that you use only for emergencies, like losing your job. 

You should save 3-6 months worth of living expenses in your emergency fund. 

In order to start your debt-free journey as soon as possible, you can also save up a smaller amount for now- and then add more to it once you’re debt-free. 

Having even a small emergency fund while you’re committed to paying down debt is so important. When an emergency comes up, you won’t be thrown off by it. You’ll simply use your savings to cover the expense, and continue on with your plan. 

Another benefit of an emergency fund is that it teaches you to rely on your own money to cover unexpected expenses that pop up, and not a credit card. Having to reach for a card when something happens would only slow down your debt payoff. 

Find out how much you can afford to pay off each month

Making a budget is oh-so-important, but it becomes especially important when you’re working towards a financial goal. 

A budget is not something that needs to be followed to a tee to be effective. You simply need to use it to be aware of your spending, and to get a feel for how much leftover money you have to work with each month. 

List your monthly income sources, and then subtract all of your monthly expenses. 

How much do you think you’ll have to add to your minimum debt payments? Keep this amount in mind. 

You will continue to make the minimum payment on all of your debts, but you will focus on one at a time to pay more on (more than just the minimum payment).

Take a closer look at your monthly expenses

When is the last time you reviewed all of your monthly costs, and decided which ones could be removed or cut out entirely?

Do an audit of your monthly expenses by listing each one, and first deciding if that expense is necessary.

Could you get rid of it even just until you’re debt-free? Is it something you forgot you were paying for, and should cut out for good? 

Some expenses, like groceries and transportation, are always necessary- but they can be reduced, giving you more money to put towards your debt! 

Some recurring bills, like your phone bill, can also be reduced by negotiating with your phone provider or by changing to a cheaper plan. 

When I committed to paying off my student loans, I went with a cheaper phone and internet bill- plus I moved to a cheaper apartment. I found a few subscriptions that I forgot I was paying for, too. To cut down on miscellaneous spending, I also committed to buying second-hand goods only until I was debt-free.

Make sure that you take the time to carefully assess each of your bills- you may be surprised how much you can save yourself!

If you want to review your spending the easy way, check out Trim!

Trim is an app that constantly works to help save you money. Here’s how it works: once you link your credit or debit card, Trim helps you to cancel old subscriptions, set spending alerts, check how much you’re spending in certain areas, and automatically fight fees. They can even negotiate your monthly bill costs for you! Sign up for Trim here!

Pick a Debt Repayment Method- Snowball or Avalanche?

Now that you know how much extra money you have to put towards your debt each month, how do you know where to allocate that money? Do you divide it up equally amongst several credit cards or loans? 

There are two debt repayment methods that could work well for you- these methods are so helpful because they were designed to keep you motivated along the way!

Note that you will continue to make the minimum payments on all of your debts- these repayment methods will help you to determine which debt you will pay more on (above and beyond the minimum payment).

The Debt Avalanche method is where you pay off your debts in order from the highest to the lowest interest rate. 

If it drives you crazy how much you’re paying in interest, then paying off the highest interest rate first should keep you motivated. 

Once you have the first debt paid off, move on to the debt with the next highest interest rate- start to put extra money on this debt every month now (including the payment from the debt that’s now been paid off). Repeat until you are debt-free!

The Debt Snowball method is similar, except you’re paying your debts off in order from the lowest amount owing to the highest. This is how I have been paying off my debt. By starting with the smaller debts, they will take less time to be paid off. 

Even if it’s a small debt, you’ll feel great when one is paid off! You’ll feel motivated to stick to it as each debt is eliminated.

Bonus Tip: Start a side hustle to get out of debt

If you’re in the business of getting out of debt fast, you’re already on the right track. 

You’ve stopped using your credit cards, you’ve reduced your monthly expenses as much as you can, and you’re putting more money on your debt than ever before.

At the end of the day, there’s only so many expenses you can cut out. Want to throw even more money at your debt every month? Start a side hustle! 

This could be starting your own business (like a blog!) to make extra cash, or it can be a part-time job.

If you’re not sure if it’s worth it, figure out how much money you could make at a part-time job in your area. Would you be looking at another $100, $200, or $500 a month? 

If you had an extra $500 a month to pay off your debt, how quickly could you be debt-free? 

This may or may not be worth it for you, but oftentimes, this is a sure-fire way to get out of debt quicker than you would by just cutting costs every month.

Becoming debt-free is no small task, but the reward at the end is a big one! 

Imagine what you can do with your money when you don’t have monthly payments to make on student loans or credit cards. That’s exactly what is pushing me to get rid of debt for good, and I can’t wait to get there!

What is driving you to pay off your debt? Share your debt-free motivation below!