Do you feel like you’re never going to pay off your debt? No matter how hard you try, it seems like the balance never gets smaller?
About two years ago, just my credit card debt totaled over $16,000! Even though I was paying more than the minimums, the total never seemed to budge.
Already having a car loan and a hefty mortgage (gotta love property taxes), the credit card debt started feeling pretty uncomfortable at the $10k mark.
By the time it had ballooned to $16K, I was feeling desperate. I needed to get out of debt.
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Focus on one debt at a time.
When you have extra money to pay off your debt, it’s tempting pay a little extra on each of your debts. But, when you spread out extra payments, the results are hard to see. An extra $20 or $50 on each debt isn’t as noticeable as $500 paid on one debt.
You’ll be motivated when you see real progress happening on your goals. And when you’re motivated, you’ll want to keep the progress going!
Choose only one debt to apply any extra payments to. While you are focusing on one debt, pay only the minimum for all other debts.
I had been applying little extra payments to several different cards. It was no wonder the balances never seemed to change.
Once I started applying all the extra money to the same card, I saw the balance of that card drop significantly each month. Yeah for progress!
Set small progress goals.
Instead of setting a (seemingly impossible) goal of paying off all your debt, try breaking your overall goal into smaller, more attainable goals.
To come up with a good goal, you might want to read about how to set a SMART goal. Make sure your goal is specific and attainable for the best results.
For me, that big goal of $16K was too overwhelming, so I broke it down by card. The first goal was to pay off a card with a $1k balance. The smaller goal was easier to reach and didn’t feel as unattainable as the total goal did.
Speed up your debt payoff by making extra cash.
One of the easiest ways to start seeing real progress on your debt payoff is to find extra income.
One day of the biggest reasons I was so successful in paying off our credit card debt was I went back to work full time. While I’m not saying you need to quit being a stay-at-home mom, you may want to think about how badly you want to get out of your current situation.
Need some ideas? Check out this post from Making Sense of Cents-she’s got 75+ ways you can make money. There’s ideas for every situation: from making money at home to how to get extra cash when you’re already employed.
Put any extra cash toward debt.
In addition to whatever you have budgeted to your debt payoff goal, put any extra or unexpected income towards debt.
- Rebates or refund checks
- Mileage reimbursements from your employer
- Tax refunds
If you are paid weekly or biweekly, there will be months where you get an extra check. You can quickly pay off debt when you are applying an entire paycheck towards your debt!
If you pay cash for purchases, don’t spend the change. Instead, accumulate any pocket change then deposit it in your bank every month or two. When you make the deposit, turn around and send that amount as a payment to your debt.
Twice a year, I got an extra paycheck thanks to timing of paydays. Those months with the extra paycheck are a great (sneaky) way to boost your debt payoff.
I won’t lie, it was hard to not want to treat myself when I got a big tax refund check. Watching the credit card balance go down by several thousand in one statement period? Totally worth it!
Make it automatic.
If you are making extra budgeted payments toward debt, set it up on auto-pay. You’ll be less likely to forget a payment or worry about the money getting spent elsewhere just because you have it.
When I first started paying off debt, I wasn’t as diligent about sending in those extra payments. Once I set up the additional payments through my bill pay, those payments started happening every month. No more forgetting!
Paying off debt is not easy.
Over the course of a year, I managed to pay off all my credit card debt. All $16,000 worth. It wasn’t easy but it was totally worth it!
You can do it too!
I highly recommend checking out the tools undebt.it! You can plug all your debt information in and track your progress towards being debt-free. Plus you can see how different payoff methods affect your interest costs and timeline!
Focus on one debt at a time and set small goals so you can be motivated with your progress. To really speed up your repayment, consider additional ways to earn money and apply any extra cash to your debts. With these tips, you will start to see your balances decrease and your debts paid off sooner.