If you have a large income or the ability to create an extra disposable salary, getting out of debt can seem easily in reach. But not everyone has the time or capacity to take on another job, or increase their income through other means. So, how can you pay off debt quickly when you’re not bringing in more money each month? Here’s the approach I took as I paid off $14,000 in just over a year.
Step 1. Assess Your Spending Habits
One of the first things I did when I made the decision to be debt-free was to gather up my bank statements and evaluate my spending habits. It’s hard to continue making excuses when the numbers are staring back at you in black and white, so this was a big moment for me.
If you have a budget, you can see identify your problem areas (e.g. those areas where you tend to overspend). If you don’t have a budget yet, now’s the time to make one. Then give it a good hard look. Are there certain purchases you make every month that you don’t take advantage of to the fullest? Name three actions you can take right now to save money each month.
Step 2. Set a Debt-Free Date
The next step is to know the exact date you will become debt-free, as well as the amount of payments you need to make each month. I did this by signing up for ReadyForZero’s free debt plan, which not only helped me visualize my progress with their debt-tracking charts, but allowed me to sign up for bill reminders and make payments directly through their site.
You don’t need to use that site, but you should use a debt calculator to make it easy for you to stay on track. Choosing a debt payment method is key to the success of your debt journey, so find a strategy that works for you. The less effort you have to put in, the easier it will be for you to reach your goal.