5 Strategies For Paying Down Debt

There’s a reason why the phrase “saddled with debt” exists. Whether it’s student loans, credit card debt or a looming car payment, living with debt means you’re no longer in the driver’s seat. Rather than you managing your money, your money’s began to manage you.

But it doesn’t have to be that way. Sure, the road to achieving financial freedom isn’t without its twists, turns and pit stops, but taking control of your finances ASAP can help you get there even faster. If you’re one of the 80 percent of Americans living with debt, continue reading below for five tips that will help dig you out.


Anyone who’s serious about paying off their debt should know how much they owe, who they owe it to, and when it’s due. Before you do anything, make a comprehensive list of all your debts that includes information like the name of your creditors, accompanying interest rates, minimum monthly payment and more.

Creating a list of all your debts is the first step toward actualizing a debt-free life. But more importantly, it gives you a birds-eye-view of your financial health.


With different debts come different interest rates, which is why it’s important you prioritize certain ones over others.

Let’s say you have three different loans you need to pay off at three different interest rates: a car payment (4%), a student loan (6%) and your credit card (14%). Tackling your credit card loan first is the most effective strategy toward becoming completely debt free down the road, as it ensures greater financial rewards while freeing up more money to pay off the other debts. If left unchecked, the credit card’s interest rate could multiply to an unmanageable amount.

But don’t take our word for it. According to a study by Experian, the average American has a credit card balance of $6,375. That’s why we recommend setting up an automatic payment that allows the credit card company to deduct money from your account on a set date. This will help you avoid late payments and take some much-needed weight off your shoulders.


If you’re lucky enough to come into an unexpected sum of money, it’s human nature to think of this as an excuse to spend even more. This could be in the form of a gift, a free concert ticket, a lower-than-usual utility bill or even a fat tax return. For however much you should’ve spent on such expenses, consider instead putting that sum toward paying off debt.

Think about seizing special occasions like your birthday, Christmas or an anniversary celebration as an opportunity to slowly chip away at your debt. Why ask for a gift card to your favorite store when you could be using that money to pay off student loans? And if you happen to receive a non-monetary gift, there’s nothing stopping you from flipping the item and making a quick buck.

If there’s one thing you should know about paying off debt, it’s that everything counts. So next time your office brings in a free lunch, or your AC bill is even a couple dollars shorter than usual, use this as an excuse to pitch in extra dollars toward your debt fund.


For many, paying off debt entails a lot more than simply saving – they’ll have to work extra, too.

But landing a side hustle doesn’t have to be a sacrifice, as many people have successfully transformed a hobby into another source of income. If you’re the type of person who likes to make crafts in their spare time, consider starting a shop on Etsy where you can find some interested buyers. Or if you enjoy photography, you’ll never which of your friends is willing to pay for a senior photo, engagement picture or the like until you ask them!

A side hustle can also take on the form of driving for Uber/Lyft, renting out your pad on Airbnb, or tutoring at your local school/university. Whatever you choose, a great side hustle should work around your schedule without interfering with your duties at your current place of employment,


The act of physically writing down every expense is a great way to keep a running tab of how much money is leaving your bank account day in and day out. We recommend carrying a notepad and pen around with a page dedicated to each day’s worth of expenses. To truly get a sense of your spending habits, try assigning a highlighter color to different expenses (groceries=red; bills=yellow; entertainment=blue). At the end of the week, total each category so can you determine what habits you need to cut out.

If the pen and paper method isn’t for you, consider finding an accountability buddy who you can trust to report all expenses too. This could be a spouse, a mother or father, a child, or a close friend. Being forced to share every dollar and cent spent with a close one might just halt you from buying that $5 cappuccino in the morning.

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