How to Pay Off Debt Quickly

Welcome!! I am seriously SO glad that you want to quickly pay off your debt.

It will come as no shock to you that the average older millennial has $42,000 of debt! and nearly 60% of Americans feel burdened by debt in 2020!

Those are some pretty scary statistics.

Since you're reading this post, I assume you don't want to be part of these statistics any longer, are sick of worrying about debt, and ready to start living a thriving life!

I'm right there with you.

I'm going to walk you through some debt repayment strategies that will help you stay on top of your debt and on track to living a debt-free life!

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Pick Your Debt Strategy

If you don't have a strategy to pay off debt, I can guarantee that it will take you longer to get out of debt than it needs to.

When I first started out on my personal finance journey, I didn't really have a debt repayment strategy that I was working with. My "plan" was to pay a little extra whenever I had leftover money each month--but I had no system for tracking when I actually had extra money, and therefore little incentive to pay it towards my debt.

Without a plan, I made very little progress on paying off my loans.

Don't make the same mistake I did!

Here are some popular strategies to speed up your payoff process:

Debt Snowball

Debt Snowball: While paying the minimum payments on other debts, focus on paying extra on the smallest debt first. When you have paid off the smallest debt, add what you were paying into the payment on the next largest debt.
- Pros:
  - Builds confidence and motivation.
  - There is so much satisfaction when you pay off a loan and close an account, which will help you keep going.
  - Cons:
    - You may end up paying more money in the long run if some of your higher balance accounts also have higher interest rates.

Debt Avalanche

Debt Avalanche: While paying the minimum payments on other debts, focus on paying extra on the debt with highest interest rate. When you have paid off the debt with the highest interest rate, add what you were paying into the payment on the next highest rate.
- Pros:
  - Paying off debts with higher interest rates will save you money over time.
  - Cons:
    - Requires more patience. It may be harder to keep up motivation without immediate results.

Debt Consolidation: Combine multiple debts into a single new debt at (ideally) a lower interest rate. This makes your payments more manageable/can give you a shorter payoff period.
- Pros:
  - Fixed payments and loan term may help you pay off debts sooner.
  - Simplified finances mean you don't have to juggle multiple due dates each month.
  - Lower interest rates will help you save more money over time.
  - Cons:
    - There may be some upfront costs (balance transfer fees, closing costs, annual fees, etc).
    - It is possible that your consolidation loan could have a higher interest rate.

Debt Management Plan: If you are facing large amounts of debt and struggling to make progress, a Financial Coaching Plan (like Save Live Thrive's Individual Money Coaching Program) can help you create a simplified strategy to stay accountable and focused in your debt-repayment journey.

Stay on Target!

Make a Budget

Making a budget is critical to help you pay off debt quickly!

Create a zero-based budget to be sure that you are making the most of every dollar coming in and out of your bank account.

Make Extra Money

Pick up a side hustle (or two!) to increase the amount of money you can pay towards your loans each month.

Looking for some side hustle ideas? Check out this post on 60 Side Hustles You Can Start This Year.

Lower Your Bills

See if there are ways that you can lower your monthly bill payments.

Some ideas include:

Reducing your monthly subscriptions
Unplugging electrical appliances when leaving the home (phantom electricity is real!)
Turning off the water faucet unless directly using it
- (Example: don't keep wanter running while you are brushing your teeth).

Starting with these strategies will help you pay off debt quickly so that you can stop worrying about money and start living the life you have been dreaming of!

<3 Charlotte

P.S.

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