16 ways to Get your Debt Paid Off fast

By September 10 1 0

Debt is a terrible problem because it grows and worsens if you don’t get it paid off. In this post, I’ll show you 16 immediate things you can do to slash your debt and build momentum to totally wipe it out.

1. Get your Debts Paid off by killing subscriptions for things you don’t use

If you are in debt I would be willing to bet that you have your fair share of subscriptions. I’m also sure there are at least a few you just plain don’t use. The broad category of services is what we are really after here. Do you have services like Netflix, Pandora, and Hulu that you don’t use? Canceling these things will but money in your pocket by the end of the month. Here is how you can make some extra money to get your debt paid off. 

  • Come up with a candidate list of things you could potentially cancel. Write it down and keep it for the future.
  • For each service look into exactly how to cancel. Can you do it on the website? Some places require for you to actually call them to do it. Find out what needs to be done and do it.
  • If you paid for something for a year in advance find the end date and make a note of it. Make sure you disable auto-renew so that you aren’t billed again by surprise.

2. Get your Debts paid off with some Negotiation

For most people, their income is simply the take-home pay from their job. There is a prevailing sentiment that salaries are somehow dealt out like cards in is some mysterious Caribbean Poker game. This isn’t true though. Your salary was offered to you and accepted it. The catch is that you were likely so happy to get that job you didn’t really wrangle up your salary as high as you could have. It’s not too late though. You can revisit your salary with these simple steps.

  • Contact your HR representative via email. You will likely find their email on mass emails from the corporate office.
  • Make an appointment to discuss your salary.
  • Don’t be nervous. The worst you will hear is “no”. Ask and you shall receive.
  • In your negotiation, start way high. If you make $60k ask for $100k. They will initially laugh, but likely they will come down to the higher side of what they can give you. Most people ask for a $10k bump and walk away with $4500. You can do much better with a little strategy.

3. The IRS Can Help Getting Debts Paid Off

When you started your job you filled out a W4. This essentially dictates how much tax will be taken out of your paycheck. Some people think it’s smart to have a smaller paycheck each month and get a refund when they file their taxes. Most people get their refund and blow it on some item. If you are in debt you will obviously benefit from a higher paycheck. You can use this surplus to help pay off your debt. Be careful to aim your total tax filing burden down to 0. That is to say, it doesn’t matter if you get a refund or write a check when you file your taxes. What matters is that number is close to 0. This gives you the optimal paycheck.

  • Look on your pay stub and see what your withholdings are
  • Run scenarios on paycheckcity to see the which resulting scenarios will help you out
  • Download a new w4 here and submit it to you accounting department
  • Change your withholdings to help get your debt paid off.

4. Get your Debt paid off by Getting Organized

Being disorganized is probably the most common thing that lands people in debt. It takes thoughtful control to use money responsibly. Get started on this by having online accounts for all of the services you use. When you have immediate access to any account you will insight to how you are being charged and if you are getting real value.

  • Take an inventory of services that cost you money and make an online account of those things
  • Use a password storage system #Affilitate link
  • Get familiar with the websites that control your spending habits so you know how to lookup data that is relevant to you.
  • Stay on top of things before they become a problem.

5. Simplify your life by simplifying your spending

If you have multiple ways that you can spend your money you inevitably will and it will be much harder to track and control. For example, if you spend through cash you get almost no tractability on where the money went. You can aggregate through one credit card and have full transparency on all spending. If you spend through credit cards you can take advantage of rewards points or cash. This literally a way to make money.

  • Make a list of ways that you are spending money
  • Decide the best way to aggregate your spending into one method; this is likely through a credit card
  • Get familiar with that card’s website and learn how to analyze your spending.
  • Avoid using cash or debit cards for things. They have no tractability and more likely to expose you to ATM fees.

6. Make a concise debt payment by having a budget surplus

Debt means that you owe money that you don’t have. The question becomes where are you going to get that extra money each month to put towards that payment. The answer to this is in budgeting. If you can make a specific budget each month then you can set aside an exact amount that you can pay toward that debt. You can do this today and accurately project when you can get out of debt. This will also help prevent you from getting into more debt in the future.

  • Click here to learn exactly how to make a budget
  • Part of making a budget is committing to what you try to cut your spending on. Make this commitment and stick to it.
  • Finally, use your budget surplus to estimate the amount of time until you are fully free from debt.

7. Use credit offers to stop your debt from growing

This sounds like borrowing from Peter to pay Paul. Generally, this is bad advice but if Peter has a 0% interest rate is makes perfect sense. Credit card companies know that there is a market to help people get out of debt and they are willing to entice you in with 0% interest rates. Most credit cards have an interest rate of at least 10%. If you use an offer like this wisely, you can cripple the growth of your debt.

  • Scan through the website of your bank or other credit cards. Often times you will find you have earned a “balance transfer” deal. This can be as low 0% interest rate for a fixed time frame.
  • Beware of offers that have a fee for a balance transfer. In some cases, it might sense to pay the fee, but you should hold out for no fee and 0% interest.
  • You might find similar offers in the mail. Keep an eye out. Not all of your mail is trash. Even though, these days most of it is.

8. Reduce your debt by half

Like most things in life the problem of getting out of debt mostly psychological. The previous steps above have been more mechanical in nature. In this step, you should learn to set goals. The goal of paying off all of your debt can seem lofty that’s why you should make a goal to know when you will be halfway done. To get your finger on the pulse of the halfway mark try the following steps.

  • Dig into all of your financials and determine what your total debt is.
  • Take advantage of the previous steps above to determine how much you pay toward that debt each month.
  • Identify the half way point and mark it on your calendar so you don’t lose focus of your goal

9. Make a mental shift to lower your debt.

A lot of people are just accepting of debt. They will make poor decisions just because the people around make poor decisions. You need to distinguish between perception and reality. Your perception might be that debt isn’t much of a problem because the news says everyone is in debt, but the reality is debt is slavery. John Adams said, “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt”. Debt is slavery at every level and this must become a standard that you are not willing to accept for yourself. Make this mental shift.

  • Understand that debt is a problem with real consequences
  • Don’t surround your self with poor examples
  • Move forward with purpose and conviction to get out of debt and get ahead.

10. Nothing slashes debt like a bigger paycheck

We talked about salary negotiation above but you should see some gain in your paycheck each year regardless. Inflation is a thing and if you aren’t making more money each year you are losing ground. Do you get a salary increase each year? Do you get a Holiday bonus? If you don’t, there is nothing wrong with asking for these things. You can even ask for a guaranteed Holiday bonus. People that ask for a guaranteed bonus probably get one. If you are too shy, I’d bet you get a $500 Amex gift card instead of a $5k bonus. Take these steps to help yourself.

  • Get to know your pay stubs for each paycheck
  • Do you get an increase each year?
  • Don’t be afraid to ask coworkers that you know well what they are getting. Some people would say this in poor taste but if people don’t talk about what they make the only person who benefits is the employer.

11. Benefits are money in disguise

I’ve seen this many times where people have glamorous benefits with low utility and a sad paycheck for their standing. Benefits like baseball games, polo shirts, coffee mugs all represent money the company is spending on retention and brainwashing. Your benefits might have some optionality that you can convert to cash. For example, if you have more vacation time than you ever use, ask if they can just add that into your paycheck. If you have health benefits through a spouse or the military ask if they can increase your salary there.

  • Read the employee handbook and get to know every benefit that you have.
  • Identify the ones that you think are the most convertible to a paycheck addition.
  • Things like vacation time, health insurance, or even bereavement time are up for discussion. Any of these things might make for a bigger paycheck

12. Lowering your stress can raise you bank balance

A really common way to burn money is by insisting that you have the best of everything. This could mean the latest iPhone or even an exotic laptop that you just don’t need. The histogram below explains it best.

Histogram of value

You don’t need the latest and best of everything. Consider if you really need something before you buy it.

  • Resolve to buy to things only if you really need them
  • Clothes are big money vacuum. Clothes do wear out but if have clothes you have never worn this should signal to think twice about buying more.
  • Electronics always get cheaper in time. Don’t buy generation 0 of a device. It will be much cheaper in two years.

13. Get your Debts Paid off by Paying Less for Insurance

It’s not hard to find people who are utterly in love with their insurance company. There are typically two reasons for this. The first is that the insurance company paid a claim form them and now they are in love forever. The other commons reason is the had some savings buy switching to their current insurance holder. The truth is you can almost always get cheaper insurance by simply shopping around for it every few years. Here is how to do it.

  • Look at your current policy so you can make a clear comparison
  • Explore insurance through other companies like Farmers, Geico, or Allstate.
  • Take the cheapest insurance where you feel that it is still easy to file a claim. Use your savings to get your debts paid off.

14. Learn from the past to have more money in the future

There are a variety of reasons to get into debt. Some are unavoidable and unfortunate circumstances but some were just bad spending habits. It’s important for you to take inventory over the recent past to separate your spending into these categories. 

  • identify when your debt started to accrue
  • separate out avoidable debt from unavoidable 
  • learn your lesson for the past and remember the effort it took to recover from it. 
  • Just putting some effort into this will help you get your debts paid off.

15. A new job will have a new paycheck

You should always keep your options open in terms of work. This means keeping your resume up to date and at least browsing job sites like indeed.com.  A new job might be a chance at a better salary but it also might be your parachute if your current job decides “right-size” itself.

  • Update your resume so you are ready to go if you have  a chance
  • Make a linkedin profile. You don’t have to stay active on it but use it as away to keep your contacts hot
  • Don’t let complacency run your life. If you want to get ahead sometimes you have to take some chances. 

16. Adults have more money than kids

This seems like an obvious statement but there is something more innocuous to it. It might be time for you to grow up. What one person calls shopping another might call trading money for items you don’t really need.

  • Make money a priority in your life. When you do, you’ll organically have more of it. Use this to get your debts paid off.
  • Don’t spend your money unless you really need to.
  • You can still have the things you want in life but make sure you have what you truly need first.

Get to work …

You might have had some of these same thoughts before, but I’m sure you found a few curveballs in there. Find some additional ways to save money here. Which ones did you like? Let me know in the comments below. Reading this is one thing, Taking action is another. Taking action will get your debts paid off much faster. Which one will you take action on? Let me know in the comments below.

1 Comment
  • Cassie
    July 12, 2020

    This is great, simple, well explained advice!

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