How to Pay off Debt (2024)

3. Use the Debt Snowball Method

There are a lot of debt-payoff strategies out there, but trust and believe the best way to pay off debt is with thedebt snowball method. Here's how it works:

• Put all your debts in order from smallest to largest, ignoring the interest rates.
• Make minimum payments on all your debts except the smallest one (trust me, you want to keep everything current so the debt collectors stay out of your business).
• Attack your smallest debt with all the extra money you can get (this includes the money you freed up when you were budgeting, but I’ve got some more ideas in the section below.)
• Once your smallest debt is gone, take that payment (and any extra money) and throw it onto the next-smallest debt until it’s paid off too.
• Repeat until every single debt is gone. Whew, I’m getting hype just thinking about it!

If you’re going to get rid of your debt once and for all, you need to feel like you’re making progress—that’swhy the debt snowball works. Like a snowball rolling down a hill, the amount you’re paying on your debt grows in size and gains momentum with every debt you pay off.

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Okay, so I know there are a lot of people out there who say you should pay off the debt with the highest interest rate first (aka the debt avalanche method). That math makes sense on the surface. But I need you to understand: Paying off debt is about more than just the math—it’s about experiencing the motivation you need to keep going.

It worked for me, and I’ve seen it work for so many others. People who use the debt snowball method have a greater likelihood of paying off all their debt because they experience small wins early and often, which keeps them going till the end!

And it usually only takes people between 18–24 months to pay off all their debt with the debt snowball. Two years? That’s a drop in the bucket! A couple years of intensity for decades of freedom? Worth it!

Tips for How to Pay Off Debt Faster

Now, in my case, it took seven and a half years for my husband and I to pay off our debt ($460,000 is . . . different). But during that time, I picked up some tips to help you speed up your own debt payoff.

Break Up With Debt

You have to draw a line in the sand and decide that you’re done with debt. Matter of fact, go ahead and decide thatright now. You can’t solve a problem while continuing to create it.

I’m talking no more swiping that credit card or taking out personal loans for things you can’t pay cash for. Those habits have gotten you where you are now, and they won’t help you get out. If you want something different, you have todosomething different.

Use the Envelope System

The cash envelope system (aka cash stuffing) is a great way to help you get your spending under control and stick to your debt payoff goal.

Basically, you take the amount you’ve budgeted for certain categories (like groceries or clothing) and stick it in labeled envelopes. Your goal is to only spend the cash you’ve got in each envelope for the month. This is the kind of habit that will hold you accountable and keep you on track.

Meal Plan

Food is usually our biggest budget buster. Butmeal planning can help you save more each month.

And listen, it doesn’t have to be this overwhelming chore that takes up your whole weekend. Just choose a couple ofbudget-friendly meals, try to use ingredients you already have, and decide which nights you’re cooking and which nights you’ll have leftovers. Easy peasy.

Sell Stuff

One person’s trash is another person’s treasure. Dig through your kids’ rooms and search through the black hole of your closet to find things you can part with. Thensell your stuff onlineto make some quick cash.

Y’all, I once sold my bath mats on Craigslist! I was shook—folks will buy anything for the right price. Or if you'd prefer to sell your stuff the old-fashioned way, host agarage sale.

Get a Part-Time Job

Finda side hustle or twoto earn some extra cash on the side. Become a driver for Lyft or Uber. Deliver pizzas. Walk dogs for Rover or Wag.

Sam and I did everything from hosting jet ski tours to working at a vinyl tint and lettering garage when we were paying off debt. Whatever you decide, dosomethingto get more money coming in every month so you can pay off your debt quicker—and celebrate sooner!

Pause Investing

I didn’t stutter.Stop contributing to your retirement investments—and that includes your 401(k). Why? Because right now, you want to throw everything you can at your debt so you can pay it off faster.

Don’t worry, it’s only temporary. You can start investing again once you’ve paid off your debt and saved up a fully fundedemergency fund. By then, you’ll have enough money freed up that you can put evenmoreof your income toward retirement. I did this myself and, trust me, this kind of focus works!

Ditch Your Car Payment

Right now, the average monthly payment for a new car is $738.¹That’s a hot mess! Think about how much faster you could pay off debt if you traded in your expensive ride for aused car you can actually afford. Then, you could throw that car payment at your debt snowball every month—instead of out the window. And later, when you’re debt-free, you can save up tobuy your dream car in cash!

When Sam and I were getting out of debt, we went from being a two-car family to a one-car family. Sure, it took a lot of extra coordination, but you’d be surprised how this really can help you kiss that debt goodbye.

Take Financial Peace University

Without the right plan, it’s hard to make progress—and even harder to keep yourself from going back into debt later.

Financial Peace University(FPU)will teach you how to pay off debt and stayout of debt. FPU has helped millions of people take control of their money and go after their goals with confidence. The principles taught in this class changed my life, my marriage and my money for the better. And they can change yours too!Find an FPU class that works for you.

I know the road to debt freedom can be tough. But I know it’s possible. If my husband and I could do it, I promise, you can too.

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