8 Strategies to Pay Off Debt Fast

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After featuring my friend MJs debt payoff story, a lot of other people have made declarations of becoming debt free.  His story was motivating and inspiring.  If you haven’t read the post yet, as a teacher he paid off over $39,000 of consumer debt in less than in 21 months.

According to an article by Nerd Wallet, the average U.S. household with debt carries $15,675 in credit card debt.  In fact, credit card debt costs consumers an average of $2,630 in interest per year, assuming an average APR of 18%.

Paying off a large amount of debt can seem overwhelming but it doesn’t have to be.

The thing is anyone can become debt free.  It takes dedication and will power but you can do it too. In order to help others on the path to becoming debt free, check out these 8 strategies to pay off debt fast.

8 strategies to pay off debt fast

Create a Budget

The first strategy to pay off debt fast is to create a budget.  A budget is telling your money where is goes so you aren’t worried about where it went at the end of each month.

Your budget should take into account the following information:

  • Your income
  • Fixed Expenses
  • Discretionary Expenses
  • Saving

Related: Budget like a Pro with 5 Simple Steps

Lower Your Expenses

The second strategy to pay off debt is to lower your expenses.  Since you have already created a budget, it is easy to see exactly where your money is going each month.

Review all your expenses for the prior month.

Discretionary spending is the easiest category to lower.  This is where it really comes down to distinguishing wants from needs.  You can also negotiate some of your seemingly fixed expenses to get a lower monthly payment.  For example, the internet is a bill that I regularly negotiate amount others.

Related: 10 Items you Should Slash from your Budget

Increase Your Income

After you have lowered your expenses, it is time to bring in more income.  There are many ways to bring in more income especially during the holiday season.  Maybe your full-time gig will let you work extra hours for overtime.  In addition, retail stores typically hire for the holiday season.  That part-time holiday gig could turn into a longer gig.

When I raised my credit score over 150 points and paid off over $10,000 of debt, I worked a second job at DSW.  What I thought would be a seasonal gig, turned into a 3-year part-time job.  Despite working 50-60 hours per week between both jobs, it didn’t seem so bad.  I found a part-time job I enjoyed.  I found friends through the job.  It is important when looking for extra income that you find something you are good at and that you enjoy.  First of all, if you enjoy the job you will be able to work there for a longer period of time.

Retail jobs aren’t the only part-time jobs available.  There are plenty of other side hustles you can pick up right at home to make extra money like:

  • Freelance Writing
  • Virtual Assistant
  • Social Media Management

For more online side hustles, check out this post of 10+ online side hustles to make extra money fast.

An easy way to make extra money with little work is to take online surveys.  I signed up to take surveys with American Consumer Opinion and Swagbucks after hearing about them from blogger friends.  Both sites are super easy to sign up and the companies are legit.  Most importantly, it is free to start.  With Swagbucks you get $5 just for signing up after you complete a certain number of tasks in 60 days.  Click here to try American Consumer Opinion and click here to try Swagbucks.

Related: 10 unique ways to make $250 this month

Pay More than the Minimum Payment

After you have lowered your expenses and earned additional income, it is time to pay more than the minimum payments toward your debt.

Your credit card statement will show how much additional you will pay in interest if you only pay the monthly payment toward your debt.

Debt Snowball Method

Now that you have gotten your bearings and started paying more than the minimum payment, it is time to put a real strategy in order to pay off debt faster.  Enter the debt snowball method.

List your all your debts from smallest amount owed to the largest amount owed.  First, you are going to focus on the smallest bill.  Therefore, pay the minimum amount owed on all your bills except the smallest bill.  Then put all your additional income on to the smallest bill.  Once the smallest bill is paid off completely, use the money that you were paying on that bill to go to the second largest bill.

The snowball method ignores the interest rates on your current debts.  The point of the snowball method is to give you positive reinforcement and use that positive momentum to pay off more bills.

Here is an example of the debt snowball method:

  • $200 Medical Bill ($25 monthly payment)
  • $2000 Credit Card Bill ($45 monthly payment)
  • $8000 Student Loan Bill ($85 monthly payment)
  • $15000 Car Loan Bill ($300 monthly payment)

In the situation above, pay the monthly payment on the credit card, student loan, and car loan bills.  Put all your additional money toward the medical bill.  Once the medical bill is paid off, use the money previously going to the medical bill to cover your credit card bill.  Repeat this process until all of your debts are paid in full.

Stop Using Credit Cards

It is super important that while you are focused on paying off debt that you don’t get into any more debt.  Now, I am not saying you need to shred all of your credit cards; however, you should stop using them.

Take the credit cards out of your wallet or purse.  If you leave them at home, then you will have to be more purposeful when using one.  For example, say you want to rent a car.  Often times, rental car places will charge an extra fee for using a debit card.  Therefore, credit cards are advantageous.

Credit cards are not all bad.  Credit cards provide identity theft protection as well as points that can be used for free money!  However, if you are not responsible for credit cards, they are really just costing you money.

Related: How I Raised My Credit Score 150+ Points

Balance Transfer

Another strategy to pay off debt fast is to initiate a balance transfer.  A balance transfer is moving existing high-interest credit card debt to another low or zero interest card.  The main benefit is to avoid paying high interest for a long amount of times.  Thereby helping you pay off debt faster.

There are important things to consider when completing a balance transfer.

  • First of all, a balance transfer doesn’t wipe your debt out completely.  It just moves your debt to a different credit card giving you time to pay it off without paying extreme amounts of interest.  Therefore, you want to make sure you can pay off the balance in the time allotted.  If you can’t, you will be charged the interest that you just avoided.
  • Secondly, the best balance transfer offers are reserved for those with the best credit score.  Therefore, make sure you check your credit report to ensure you are approved for the card that you apply for.

Personally, I like to check my credit score through Credit Sesame.  Credit Sesame is a free resource that pulls your credit information from Transunion.  They give you a snapshot of your current situation as well as provide tips on how to improve your credit score.  If you are considering completing a balance transfer to get a relief of the interest on your credit card, then you should definetly check out your current score.  Click here to try Credit Sesame for yourself and find out where you stand.

I know you are probably thinking, why is a balance transfer one of the last steps?  It is important to get your spending habits in check before you initiate a balance transfer as it is opening another line of credit.  If you aren’t committed to paying off your debt, a balance transfer is not right for you.

Related: Balance Transfer: The Best Way to Pay Off High-Interest Debt

Looking to pay off debt fast? Check out these 8 strategies.

Change your Lifestyle

The last but most important strategy of paying off your debt fast is to change your lifestyle.  If you don’t change your lifestyle, you will make the same mistakes that originally got you into debt.

Here are a few cardinals to live by while staying out of debt:

  • Spend less than you earn
  • Differentiate your wants from your needs
  • Don’t try to keep up with others lifestyle
  • Focus on your long-term goals instead of your short-term wants

Related: 8 Ways to Invest in Yourself in 2018


You may enjoy these other posts about paying off debt:


Have you paid off debt?  If so, tell us about your story in the comments!


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8 Strategies to Pay Off Debt Fast


  1. A balance transfer can be a huge boost for people struggling to pay down debt, but I like how you said that behavior needs to change otherwise a balance transfer ultimately won’t help. This is a good list and so much goes into each of these topics.

  2. I have used all of these tips and I can promise you, it works! It can be hard to get started, but you won’t regret it!

  3. These are fantastic tips Tia! I have personally used the Debt Snowball method and can say that it actually works! Thanks for the great post!

  4. When I had debt right after college, the only thing that got me out of it was stopping credit card use, paying cash for everything, and sticking to a budget. I never stopped these methods, and have stayed out of debt for the past 15 years.

  5. Love that you included the debt snowball. It really gives you a mindset boost right out the door and when it comes to paying debt off it’s all about the mindset.

  6. First step is most important – stop spending all your money! I realize it sounds easy — because it is. LOL Unless your actual bills are more than your income then find a way to cut your bills and increase the income you have coming in. Now that is actually easier said than done but if you are ready to make some changes you will find ways to make that happen.

  7. Great list. I think the most important tip on here is to increase your income. Since I’ve done that, I’ve had success in paying off several debts. It will be even better next year!

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