Debt. I hate that word. I think it’s an issue most of us deal with but never want to talk about. This past year, Joe and I were lucky enough to pay off A LOT of unwanted bills. So, I’m sharing my 10 tips for paying off debt that worked for us and hopefully will work for you!
At one point, it seemed like we were drowning in credit card bills. Interest rates were through the roof and killing us every month. It just felt like there was no way we were ever going to tackle it all. One credit card was so high, we could barely afford the minimum payment, much less make any extra payments.
Just to clarify, when I say debt I am mostly talking about credit card debt. Of course, I wish we were completely debt free with no car payments, no student loans, no mortgage, etc. But let’s be real. I think some debt is just a given these days – we need a place to live and a car to drive to work.
10 TIPS FOR PAYING OFF DEBT
1. WE REFINANCED OUR HOME
This was the big one for us! After buying our house at the low end of the market, over the last three years, the property value of our home increased by a $60,000. Lucky for us, that meant when we refinanced we got a big chunk of that. Without getting into all the numbers, basically, you are only allowed to have a percentage of that when refinancing. But what we got was enough to pay off some really high balance credit cards and then some.
2. BALANCE TRANSFERS
I have a few of my own credit cards that still needed to be paid off and balance transfers became my new best friend. Transferring my balance to a 0% interest card, meant I could pay it off faster and set a goal. Most are 15-18 months and you know exactly how much needs to be paid each month to pay off in time. Bonus: keep track off all your credit card payments and payoffs with my FREE printable!
Another big tip is DO NOT USE these credit cards after the balance transfer. They are simply for paying off your previous debt, not racking up anymore.
3. USE THE LADDER SYSTEM
Unfortunately, if you don’t have good credit it can be hard to get offers and be accepted for the 0% interest cards. In order to still pay off our debt quickly, we pay the most on our highest interest credit card first. You can too! Create a list of your debts from the highest to lowest interest. Pay as much as you can on the one with the highest interest, even if it has the lowest balance (the interest is how it all adds up) and pay the minimum on the rest. Once, that’s paid off move on to the next using the money from the previous debt.
Here are a few ways to save money so you can pay the maximum amount each month to pay off that debt!
4. NO SPENDING SPREE
Every couple months I commit myself to a no spending spree. In my previous post, I’ve shared with you exactly how I do it. It becomes a fun challenge for myself to see just how far I can go without spending a penny. I’ve also heard recently of the “four-day rule” – make a conscious effort to not spend four days out of the week. That means no fancy coffee in the morning, outings for work lunch, etc.
5. SELL, SELL, SELL
Got some old stuff laying around? Sell it on local Facebook pages, Craigslist, Offer Up, etc. Clean out the garage, storage room etc and see what can be sold. If you aren’t sure where to start – check out my 10 Days to an Organized Clutter Free Home Challenge! At first, it might not seem worth the hassle just to sell an old table for forty bucks, but when you are trying to pay off debt every little bit counts.
6. SAVE IN BULK
This is a big one. Every few months, Joe and I make a big trip to our local Costco. We buy non-perishable items like toilet paper, paper towels, laundry detergent, etc. It saves us money and I don’t have to worry about going to the store to purchase any. Ya know when those quick trips to Target for toilet paper turn into spending $150? Not anymore. I also found a way to save big on our on the go breakfasts by buying in bulk and making easy freeze breakfast sandwiches (here). I’m always working on more ways to save with food items!
7. GROCERY PICK UP
Speaking of not falling under Target’s mesmerizing bullseye, we are also started doing grocery pick-ups. Our local Walmart is the only place we can currently do grocery pick up, but if you live in a bigger city there are lots of options and even services that bring the groceries directly to your house!
The pickups have allowed us to be able to plan our meals for the week, stick to our list, and ultimately our budget. Gone are the days of strolling down the grocery aisles and buying food we don’t need just because it looked good. If you’re ready to try your local Walmart Grocery Pick-Up – click here for $10 off your first order!
If you do find yourself at the store use rewards as much as you can! I use Walmart’s Savings Catcher, Shopkick, Ibotta, Cartwheel, etc. Every little bit counts and can add up without much effort. Most apps just require you to scan your receipt. If Target is your store, I have a post on saving money at Target too!
9. CALL AROUND
A few minutes on the phone can save you money big time! Last summer, Joe and I were fed up with the outrageous amount we were paying for cable, internet, cell phone bills, etc. I got lucky and he did most of the calling around but we were able to cut all of those bills in half.
I had done some research on cutting our cable bill and knew exactly how much it would cost us each month to use a service like Sling TV. We called our cable company to cancel our service and luckily they were willing to work with us and gave us the price of the Sling TV plan! Internet was the same, we were able to upgrade our service AND get a lower price. I know it can seem like a hassle to call around or seem like you might not have time in the day, but it’s worth it when you can save over $100 month.
10. DIY IT
This tip is no secret, you know I love a good DIY project. But, knowing how to do some basic DIY around the house saves us a lot of money too. Just last week, we fixed a drain pipe in our bathroom sink. Of course, our first instinct was to call a plumber but after a few YouTube videos, we were able to do it ourselves. Knowing how to fix our sprinkler system, change the oil in our cars, etc. has saved us big time.
Even with these ten tips, one of the biggest that worked for me personally was to just be conscious of spending. It’s easy to spend a few dollars here and there, but those few dollars add up quickly.