How to Pay Off Debt

Woman uses calculator while working on a computer


If you’re worrying about how to pay off debt, you’re not alone. In 2019, people are carrying more debt than ever before—so much so that there’s something called “debt fatigue” now. Nobody wants to feel overwhelmed—and having a large amount of debt can make you feel that way. Whether your debt was incurred from a family illness, student loan, long-term unemployment or too much online shopping, saying farewell to that mountain is a must-do. So how can you dig yourself out of the so-called debt hole? Read on to find out.

Add Up Your Current Debt

Getting everything out in the open so you know just how much debt you have is the first step to getting out of it. Sit down at the kitchen table, grab a calculator and add it all up. And, most importantly, make a plan for how to tackle it.

Not Every Debt Is Created Equal

When deciding which debt to pay off first, make a list. Use the debt snowball method and pay off bills in order of smallest to largest, regardless of interest rate. By making minimum payments on all debts except the smallest (you should put as much money as you can at that one), you’ll eliminate it quicker and can “snowball” it by applying what was first spent on the smallest debt and transferring it over to the next smallest. The more you pay off, the more freed-up money you’ll have.

Find Ways to Spend Less

Changing old spending habits doesn’t change overnight—but small steps will help decrease the debt and make it feel more manageable. Try these easy ways to improve your financial health:

  • Make saving automatic. Start by setting up automatic transfers into a savings account from your checking. If it’s out of sight, you won’t feel like you are missing anything and you’ll be more likely to live within your budget.
  • Stop subscriptions and other repeating expenses you don’t need. Consider swapping cable for a cheaper streaming service (or cut the cord altogether) and put the saved money towards your debt hole). Or, nix the monthly gym subscription you haven’t been using and find YouTube videos instead to work out in your home for free.
  • Sell unwanted items. Boost your bank account (and lower that debt!) by purging possessions you no longer use or want. Whether you sell items online or hold a garage sale, it’s a quick win for your debt-slashing efforts.

Make Extra Money on the Side

Attacking your debts with the snowball method will definitely speed up the process, but finding ways to earn extra money on the side won’t hurt. Take things up a notch by finding a side hustle—whether it’s teaching yoga or freelance writing, everyone has a skill they can use to make money.

Create a Budget

And, going forward, create a bare-bones budget to see you through as you devote those saved and earned dollars toward wiping out your debt. You’ll see your debt plummet when you cut expenses as much as possible. Live on as little as you can for as long as you can. Once you’re out of debt, you can add some of the “extras” like eating out or cable TV back in. And, of course, celebrate!