pay off debt fastJust over a year ago, I had $3,000 in credit card debt… and I was not happy about it.

At the time, I had just made a career switch and had landed my dream job as a writer and blogger for ReadyForZero.

But I had spent a few months between jobs while I worked to jump start my new career and during that time I dipped into my savings and then began putting some of my monthly expenses on the credit card.

At the beginning of last year, I made a commitment to pay off that credit card by December, and to my great satisfaction, I was able to do it successfully. When I had finally made the last payment, I felt a tremendous relief and a conviction to avoid any debt in the future.

That’s why I was so excited when Jeff started the Debt Movement to help people pay off debt in 2013.

I knew that getting people together and sharing tips and experiences would help motivate many of them to stick with their plans and get to debt free ASAP. And that’s exactly what’s happened. So with the end of April approaching, I thought I’d talk about 4 secrets that I’ve learned for paying off debt faster

1| Know Your options

With financial products and services, many times people aren’t aware that they have options. And that’s a problem, because choosing the wrong credit card or loan (with high interest rates) could cost you hundreds or thousands of dollars. Before you do anything else, evaluate your interest rates. For credit cards, you want a rate closer to 10% than 20%. For other types of loans it depends, but compare to what’s advertised in order to get an idea for what is fair.

Then see if you can get a lower interest rate. Start by calling your credit card company and telling them you’d like a lower rate. If you’ve been a long-time customer and haven’t missed any payments there’s a strong possibility that they’ll say yes. If not, take a look at what’s offered by other companies. You can consider doing a balance transfer, which allows you to take advantage of low-interest introductory period – just be sure to read the fine print before signing on the dotted line.

If you have student loans, study all the repayment options that are available to you and be sure to use any federal programs that can speed up your progress.

2| Get organized

It’s almost impossible to tackle a long-term debt problem without getting your finances organized. Otherwise, how will you ever know what is causing you problems and what measures you can take to speed up your progress? The most important thing is to understand exactly where you money is going each month. Start by reviewing your budget (or creating one if you haven’t already). It may help to think of this as your spending plan because it allows you to plan how much you will spend each month – and on what.

Your spending plan should empower you to reduce your expenses in order to pay off your debt faster. That doesn’t mean you have to give up everything fun, but you should be purposeful about which things you decide to purchase each month and make sure you’re not engaging in impulse shopping or letting your short-term desires overwhelm your long-term goals. For more tips on budgeting, check out our Budgeting Tips resource center.

3| Set goals

The most famous and successful athletes use visualization to improve their performance, and the reason is that the human brain responds powerfully to what it sees. That means you can create a vision for yourself in order to get the outcome you want.

By setting a concrete goal (like “I’m going to get out of debt in 2013”) and then filling in the vision with details (like “I will pay $200 more per month”) you give yourself a clear path to pursue, which is much easier than pursuing an abstract idea like “getting out of debt.”

Make your goal concrete and envision as many successful milestones as you can. And then go get them!

4| Make income on the side

While everyone understands the concept of saving money, many of us don’t immediately think of earning more money as an answer to our debt problem. But the fact is, making money on the side has become significantly easier these days thanks to a whole bunch of new websites that connect people online.

You can get paid for writing, designing, tutoring, transcribing, filing, copy editing, designing, programming, and a million other things online through sites like where you bid for jobs posted by people all over the world. Even if you only have a few hours a week to dedicate to this, it could speed up your debt payoff quite a bit. For more on how to do this, take a look at Carrie Smith’s blog post on how to make money from home.

Editor’s note: Be sure to check our posts 25 Easy Ways to Make Money on the Side or the Best Home Based Business Ideas for other making money ideas.

Hopefully with all these secrets you will be able to get out of debt faster and get on with your life!


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Comments | 12 Responses

  1. says

    My current credit card has an interest rate of 29.99%, but I pay off the balance every month and don’t want to cancel it because that is my main source of credit and closing it would hurt my credit score. I need to start looking for a better card.

    • says

      I understand your point about keeping the card open for the sake of your credit score, but I think you’re right that you could get a card with a much lower interest rate – especially since you have a history of making on-time payments!

  2. says

    In ref to #3 – I make this a visual. I write it on a large calendar printout that we can both reference so husband and I bought know where we are. I am write it in my planner and include notations like “CC – 150 (1/4)”. This means credit card payment is $150 and there are only four payments left. Next month will be “CC – 150 (1/3)”. I do a happy dance every time I see it because I am almost there!! Also, excel spreadsheets. Obsessed.

    • says

      That’s awesome! I like the idea of writing out how many payments you have left. What a great way to motivate yourself. Glad to hear you will be done with that credit card soon.

  3. says

    I would say that Getting Organized and Setting Goals are the two most commonly ignored pointers. While some may have a strong desire to get out of debt, without fully taking control of your finances it’s going to be a tough road. These two principles helped me tremendously when I was tackling my college debt some years ago!

    • says

      I agree! Those two are very important. It’s hard to make progress without a goal and a plan for how to reach it. Glad to hear you were able to tackle your student loan debt!

  4. says

    For me, #3 was the most important. The other steps are important, but can be skipped or “forgotten”. But once I set a serious, specific goal, then I was committed. Not just to getting out of debt, but to me. I’m sure its different for everyone, but that was the one that got me on the right path.

  5. says

    Also, if you are trying to make a dent in your debt but do have to make a purchase, make sure you explore the option of purchasing online and search for a coupon or coupon code to save a couple bucks.

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