10 Things You Can Do To Get Out Of Debt – Faster
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Debt can take up a lot of space in your budget and your thoughts. These are the approaches that helped my family make a plan and work toward paying it down. Choose the steps that fit your income and commitments.
1. Make a realistic budget
Write down your recurring monthly expenses.
Include housing, food, utilities, and other regular payments.
Review each category for changes you can reasonably make.
Subscriptions, memberships, and paid services are useful places to look. Once you've accounted for essentials and upcoming expenses, see what you can put toward debt.
2. Review takeaway and restaurant spending
Small food purchases can add up. In 2018, we decided to stop ordering takeaway every week, and the change made a noticeable difference to our spending.
3. Use a spending tracker
A tracker can help you see where your money goes. YNAB is one option to explore; a notebook or spreadsheet can also give you a clear record.
4. Set aside money for your goals
Decide what you can afford to put toward your goals after allowing for bills and essentials. Setting that amount aside when you're paid can make the plan easier to follow.
5. Use an envelope system
This envelope system is one way to separate cash by category.
I prefer these sturdier envelopes.
Label an envelope for each cash-spending category and place the budgeted amount inside. The remaining cash gives you a visible reminder of what is available. Adjust the approach if cash isn't practical for your household.
6. Consider what to do with extra income
If you receive a bonus, refund, or money gift, consider whether some can go toward debt. First account for any costs that money needs to cover.
7. Earn more money
Additional income may give you more room in your budget, if the work fits your time and circumstances.
When I began focusing on debt, I sold printables on Etsy, resold clothing and antiques on eBay, and made custom websites. Working from home let me use skills I already had while caring for my children.
8. Talk to your partner about debt payoff goals
If you share finances with a partner, talk about what you each want to achieve.
Agree on the changes you're prepared to make together.
If your enthusiasm differs, listen to each other's concerns rather than treating the discussion as a test of commitment.
A regular check-in can cover recent spending, upcoming costs, and adjustments to the plan.
9. Stay motivated
I listened to Dave Ramsey's program on YouTube when I was starting to pay down debt.
It helped me stay interested in the process. Use resources that you find useful, and assess the advice against your own circumstances.
10. Choose a debt payoff method
Two approaches you may come across are the snowball method and avalanche method. One prioritizes smaller balances; the other prioritizes higher interest rates. Compare how each would work with your own accounts and required payments.
My two cents
These steps describe what helped my family. Your pace will depend on the money available and the expenses you need to meet.
What has helped you stay with a debt repayment plan?
