My Top 5 Tips for Getting Out of Debt
One of the greatest accomplishments of my life so far was paying off all of my debt a few years ago. Not only was that a huge moment in general, but it also signified a turning point in the trajectory of my life when I was able to really and fully assess where I was versus where I wanted to be, which led to quitting my day job to pursue what would eventually become a few years of solo traveling. And now that I am on the other side of debt, I am often asked about how I actually did it: how did I, while making less than $40k a year, manage to pay off over $27k of debt in less than two years? While it’s certainly not rocket science, the simplest way I can put it is that I learned how to really prioritize what was important to me, which — at the time — was getting out of debt so that I could travel.
While that philosophy of prioritizing what’s important both means a lot and makes tons of sense to me, I’ve realized over the last few years that — when it comes to getting out of debt and money management in general — it can be broken down into just a few simple and practical guidelines to help others do it, too.
Here are my top 5 tips for getting out of debt:
1. FIND YOUR WHY & PRIORITIZE IT
We all have reasons behind our actions, so if you’re ready to get out of debt, you need to figure out WHY. Is it so that you can change careers, take a big trip, start a family, buy a house? For me, it was pursuing the “more” that I knew God had for me on the other side of my day job (which, by all respects, was a good job, it just wasn’t where I needed to be). This is easily the most personal part of your debt payoff journey and likely the one you’ll come back to many times, especially if/when things get hard. Because spoiler alert: they will get hard, and things will go wrong throughout the process. But if you can remember to look back to your “why,” you’ll find the motivation you need to keep going.
If you’re stuck at this point, consider the following: when you think ahead to the next 2, 5, 10 years, where do you want to be? And then: how can being debt free help you get there even faster? Nail down your “why” behind wanting to get out of debt, and then prepare to fight hard for it to be your reality.
2. MAKE A PLAN (OR A BUDGET)
Anyone else sometimes feel like “budget” should be a dirty word? I definitely did when I was still in debt, which makes sense. I mean, I doubt anyone considers it “fun” to write out all your numbers on paper and realize that you maybe/probably/definitely need to change your spending behavior. But once you do this, I can from experience promise you that getting out of debt will be so. much. easier. When I got serious about getting out of debt, I started my budget in an excel sheet with a few simple formulas, which totally can get the job done. I switched, however, to the app EveryDollar a few months in and it really helped me to level up. It’s a zero-based budgeting tool that guides you to allocate every dollar you bring in each month into different categories for your monthly spending, which helps you see where you could be saving, sacrificing, and putting more money toward debt. Plus, it's beautiful, easy to use, syncs seamlessly with my bank for a yearly fee, and there's a mobile app.
However and wherever you choose to create your budget, the key will be to stick to it every single month. If you choose to get serious about making a plan for your money, you will find yourself on the fast track to better money management and, of course, getting out of debt.
3. FIND WAYS TO MAKE MONEY
I know that this might be easier said than done, but trust me, there are a ton of ways for you to make more money outside of your 9-5 or day job if you’re willing to look for them. In the 21 months that I spent paying off debt, I managed to make an extra $18k on top of my full-time job through things like babysitting, pet sitting, tutoring, talent-based services (photography, home organization), and selling stuff I didn’t need. Seriously, make apps like Poshmark, Depop, and Facebook marketplace your friends.
Here’s my challenge: consider all of the things you could do to make some extra cash. Could you take on a part-time job on the weekends? Are you able to offer a service of some kind that people need? Are you in a position to ask for a raise at your job? And don’t forget to look around your home and figure out what you no longer need and could try to make some money from selling.
Disclaimer: I worked my tail off while getting out of debt, often clocking anywhere from 65-80 hours per week between all of my gigs. While I don’t regret my experience — as it got me to where I am today — it was a really difficult season because I rarely took a break from all of the busyness. So, from someone who didn’t, please remember to check in with yourself every so often to make sure you’re mentally, emotionally, and spiritually okay, and then don’t hesitate to take a break when you need it.
4. SET SOME SMALLER GOALS
I don’t know about you, but when I was at the start of my debt payoff journey, the thought of being debt-free YEARS from that moment was pretty disheartening. Maybe it was a lack of long-term thinking or, you know, patience, but I knew that I needed to have some smaller goals throughout the process to look forward to in order to stay motivated. So that’s precisely what I did: I set goals for each of my debts (car, student loan 1, etc.) so that once I had paid off each one, I was able to “treat myself” to something small that I had been needing and/or wanting. And it totally worked! I think there is likely some serious psychology behind it, but when you think about a reward 2 years from now versus 6 months from now, which one gets you more excited? The one that’s closer, right?
So, as you find yourself listing out your different debts, be it a credit card, car loan, student loans, whatever, I highly recommend you consider treating yourself to a small but personally significant reward once each one is paid off. Looking at the shorter-term can help you stay motivated and on track toward getting out of debt, and you might even find that it ignites a fire in you to get it done even faster, too.
5. FIND ACCOUNTABILITY
Last and most definitely not least, you should absolutely try to find accountability in your debt payoff journey. What I mean by this is to find someone who can hold you accountable to your monthly budget and your goals to get out of debt. If you’re married or in a serious relationship, you will likely find that your partner is sort of your built-in accountability partner (assuming that they are on board with becoming debt-free). If you’re single, this is the bit where things can get challenging. When I was getting out of debt, I learned that having a trusted person in my life hold me accountable was critical to my success. I called this friend my "budget buddy," and she and I met monthly to go over my proposed budget for the month, and then again at the end of the month to compare my spending for the month. It was super helpful to have another person looking at where my money was going and who could encourage/challenge me to put more toward the debt because it meant that I couldn't spend money on something without her knowing about it.
If you’re serious about getting out of debt, accountability is crucial. Do you have a friend, family member, or mentor that you trust to help you not only make a plan but stick to it as well? If so, ask them to coffee (on you!) and propose the concept of becoming your “budget buddy.” I am actually doing this exact thing with three friends right now, and I meet with each of them monthly to go over the budgets, their debt totals, and their goals, and we celebrate each milestone along the way.
One more thing: when you’re working to get out of debt, remember that the journey is a marathon, not a sprint. It can be tempting to lose steam along the way because the process can (and probably will) take longer than you’d really like it to. When you hit those valleys, remember to focus on your “why,” take a breather when you need it, and then get back up and keep running. Because years from now, you definitely won’t regret it!
