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Do you feel like you’re drowning in debt? Do you dread going to the mail or picking up the phone because you know it’s a bill that needs to be paid? You are not alone!

The average household debt is around $15,000. That’s 4,110 Grande Cafe Lattes from Starbucks or 1,665 tickets to the movies! Sounds like a lot when you put it that way huh?

Did you know that one in three Americans carris a balance on their credit card from month to month?

If you are one of those three, it means that you could be taking that credit card debt around with you for even longer!

Regardless of how you got here, you’re here. You can’t rewind time and go back to when you made that first purchase that put you into debt, and you can’t just pay your bills.

If your debt is spiraling out of control, or you keep finding yourself in this position, you’re in the right place. Together we can tackle the debt monster! Here is a quick guide to help you pay off your debt faster.

Pay Off Your Most Expensive Debt First

Make a list of how much you owe for each debt and how much interest you are paying on that debt.

Sort the debts from highest to lowest by the interest rate.

Sorting by interest rate is the key here, as high-interest rates will cost you dearly in the long run.

Some of your smaller loans might only have a 4% interest rate, while your larger ones may be as high as 25%.

Tackling the highest interest first helps MORE of your money to go towards paying off your debt each month. And you can still use the Snowball method too, once you get one debt paid off!

Lock Up Your Credit Card

If you don’t want to continue to accumulate more debt, STOP USING YOUR CREDIT CARD.

Remove all of your credit cards from your wallet and keep them in a safe place.

I’ve frozen my cards in ice before so that I had to wait about 4 hours before using them.

If you are really dedicated to paying them off, you can make confetti with them and pulverize them in your blender or food processor (yep, I’ve done that too!).

This way you won’t be tempted to use them, and you can only use the cash you have.

Delete Credit Card Information From Online Stores

If you are going to stop using your credit cards… the online shopping world is working against you. Technology has made things very convenient for us, that includes shopping!

If you are a frequent online shopper, you may have stored your card information for a quick and easy checkout.

While this makes things easier, it also makes the temptation to spend on items you don’t need greater.

Delete that information.

You are less likely to purchase something if you have to take the time to get up, go get your wallet and enter it all in.

If you really don’t want to face this aggravation (or if it is a recurring payment), connect the account to your debit card. That will help you to analyze what you are about to spend slightly better before you click the “checkout” button.

Pay More Than The Minimum Payment

If you are only paying the minimum balance your credit cards, then it will take you a lot longer to pay off your credit card debt.

Before I got into debt, I didn’t realize how the interest on a credit card really worked. Some of my credit cards were charging me MORE interest than my minimum payment… how is that even allowed?!

That meant I was never paying anything towards the principle and my debt would never get paid off.

If you pay more than just the minimum payment, you will pay off your debt sooner, plus, you will pay less interest overall.

It doesn’t matter if you can put $20 or $1 extra toward your minimum payment, it will still make a difference!

Also, did you know that you can make additional payments during the month besides just the one monthly minimum payment. That will help pay down your debt quicker too!

Put Any “Bonus” Money Toward Your Debt

All unaccounted for money needs to go towards your debt.

Bonuses, tax refunds and holiday cash received as gifts all goes towards the goal of paying off the debt!

Once that is paid off, you’ll be able to purchase fun things each month because you’ll have more disposable money!

Avoid the temptation to splurge and instead use it to pay off your debt.

You need to focus on fixing your financial situation before you start thinking about treating yourself.

Pick Up A Side Hustle

Earning more money will help you pay off your debt sooner. Almost everyone has a skill or hobby they can make money on. Just make sure any extra money you earn is actually put toward your debt!

Use sites or apps such as TaskRabbit or GigWalk as well as Facebook groups to list your services or contact other businesses posting needs you can help out with. Here are six more ways to make easy money using your smartphone.

Another easy way to make side money is to look into getting a seasonal or part-time job until you pay off your debt. Just divide your debt by the amount you are making each week (putting towards that debt) and you’ll know how long you have to keep that job.

You can also do surveys and use cash back apps to help earn Paypal gift cards, which can be redeemed for cash.

I wrote this article about how to earn an extra $1,000 this month to give you a jump start!

Negotiate A Lower Interest Rate

Call your credit card company and other creditors to ask for a lower interest rate.

If you don’t ask, you’ll never know! And it could save you a lot of money.

If successful, you could save thousands in interest, depending on the rates you receive and how long they’re good for.

Debt Goal has a tool called Negotiate My Rate where you can see what your potential savings might be from getting a lower rate.

PERSONAL EXPERIENCE NOTE: If you are not late on your payments, then you might not get a lower rate because the credit card company is making the most on you that they can and you are paying, so why would they give you a lower interest payment? I have only had about 50% success with calling to negotiate a lower rate. Most of the time that is because we pay our bills on time. Tell them that you are worried you might not be able to pay your bills soon, and having a lower interest rate makes that bill rank higher to ensure it will get paid. The worst they can say is “no”. 

Transfer High-Interest Rate Cards to a Lower Rate Card

Like I mentioned above, you won’t always be successful in getting a lower rate with your current company.

Check to see if there are cards doing promotional 0% interest rates for balance transfers.

When you do this, you need to take into consideration whether they have balance transfer fees and calculate whether paying that would be worth the savings you might see from the interest.

Look For Ways To Cut Back

Now that you are serious about not using your cards and paying off your debt, it’s time to look for some extra money to help you pay it off quicker.

One of the first places to start is with your budget. Sit down with your family or just your spouse, and look for areas where you can cut back.

Can you live without cable? Can you cut your grocery budget in half by using coupons?

Look for opportunities to cut back on your budget and put that extra money toward your debt.

Remember Your Why

When you are paying off your debt, it can be difficult to remember why you wanted to start doing this in the first place. (I know for me, I couldn’t even remember what I bought… much less as it started to get frustrating to pay it off… WHY we were torturing ourselves?)

As you sit down and make a plan, and start making extra payments, remember why you want to do this in the first place.

Is your debt keeping you from living the life you want? Do you want to put that extra money toward another savings goal?

Keep your why in a prominent place so you can keep the motivation up, and the momentum going!

Credit card debt can be so difficult to manage, especially when your balance gets higher and higher. Focus on one debt at a time, set milestones and goals for yourself to help keep you motivated, and you will get there in no time. With these tips, you’ll see your total owed significantly drop month after month, then you’ll be that much closer to becoming debt free.

 

YOUR TURN: Are you planning to pay off your debt? Which suggestion here was surprising to you? Let me know in the comments below!

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Do you feel like you’re drowning in debt? Do you dread going to the mail or picking up the phone because you know it’s a bill that needs to be paid? You are not alone! The average household debt is around $15,000. That’s 4,110 Grande Cafe Lattes from Starbucks or 1,665 tickets to the movies! Sounds like a lot when you put it that way huh?
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