10 Key Tips On How To Pay Off Debt ASAP (2024)

If you’re here, you might be wondering how to pay off debt asap.

Well, the good news is that it’s definitely possible. With some clever strategies and discipline, you can tackle your debt and be debt-free sooner than you think.

But that depends on you.

First, one question: how much debt is too much debt for you?

For instance, for Ana, too much debt is 500 euros, and for Mila, it’s 30k euros. But if Ana only makes the minimum payments, and Mila pays more than the minimum and has a realistic debt pay-off strategy, guess who’s making payments faster?

The answer might surprise you: it’s Mila, as she has a more realistic approach to it and is trying to get rid of debt asap.

So, it is possible to pay off debt asap, but that depends on you.

Dealing with debt can indeed be an overwhelming and suffocating experience and can be incredibly stressful. Plus, it can keep you up at night.

But it’s important to remember that paying off debt is absolutely achievable.

So, stop making debt a way of life, and start paving the way towards debt-free life.

You can take control of your money with determination, discipline, and staying committed.

So, read below on how to pay off debt asap.

1. List Everything You Owe

First, you need to have a clear view of the total amount of debt you owe. So, list everything you owe.

To do that, grab a pen and paper or open an Excel spreadsheet/Google Sheets – whatever works for you. Then, jot down every single amount of money you owe and calculate it to get the total amount of money you owe.

For instance, it can look like this:

The total amount owed is 3400 euros.

It’s also good to include the interest rates and the minimum monthly payments that are required.

By doing this, you should have a visual representation of your financial obligations.

It might be overwhelming to see the total amount you owe, but remember that acknowledging and facing your debts is a courageous act.

Taking this initiative shows responsibility and determination. It’s important to remember that you’ve already taken a significant step by facing your debts head-on. You haven’t ignored or avoided them, which is commendable. So, don’t let the initial shock discourage you.

Keep moving forward and take proactive steps to tackle your debts. You’re on the right track figuring out how to pay off debt asap and improving your financial situation.

2. Make And Follow A Budget

Having a spending plan in written form, also known as a budget, is essential for managing your money effectively and avoiding debt.

It provides a clear roadmap for your income and expenses and helps you make informed decisions about where your money should go. Without a budget, it’s easy to overspend and accumulate debt.

By creating a realistic, well-designed budget, you can identify mandatory expenses and reduce unnecessary spending. And this will free up a surplus that can be allocated towards debt repayment, helping you make consistent progress towards becoming debt-free.

Plus, you’ll regain financial stability and achieve peace of mind.

One question: what happens with budgeting money once you become debt-free?

You keep budgeting because it empowers you to make informed decisions about where your money goes, ensuring that you stay on track and avoid falling back into debt.

A budget also helps you track your spending, identify areas where you can make adjustments, and prioritize your financial goals.

And figuring out how to pay off debt asap is also a financial goal.

Furthermore, a budget provides a sense of control and allows you to make intentional choices about your money.

So, start budgeting today and take charge of your financial future.

Keep in mind: it’s not enough to make a budget, you also need to follow it (or, in other words – stick to it).

Also, make sure to pick a budgeting method, such as the cash envelop system or the 80/20 rule, as it’ll help you maintain your budget.

So, making and following a budget will help you on how to pay off debt asap.

3. Track Your Expenses

Keeping track of your monthly expenses is crucial. It helps you figure out how to pay off debt asap.

By understanding where your money is going, you can make smarter financial decisions and prioritize paying down your debt.

Keeping track of your expenses is a great way to gain insight into your spending patterns. Just remember, it takes time to transform your spending habits. Don’t expect to make instant changes, but be patient and persistent.

Also, don’t worry and be kind to yourself. The fact that you’re keeping track of your expenses is a good step towards understanding your spending habits.

By doing this, you’ll be able to identify any patterns and fluctuations in your spending from month to month.

Ultimately, this will give you a clearer picture of your monthly spending.

Just make sure you’re honest with yourself. That’s all that matters.

By keeping track of your monthly expenses, you’ll gain insights into which areas of your budget you tend to overspend in, and this may apply to all budget categories.

It also allows you to identify any outstanding debt, which is quite likely. So, it’s super important to regularly track your expenses to have a clearer picture of your financial situation and make necessary adjustments.

Never, ever stop tracking your expenses, even when you manage to pay off debt. You should have it in written form. It will be easier if you have a notebook, aka a spending journal, where you’ll write about every single purchase.

At the end of the month – ideally, the last day of the month, get back to your notebook and notice your progress. Are your spending starting to get from red to green?

So, tracking your monthly expenses will also help you on how to pay off debt asap.

4. Reduce Your Expenses

Put it this way: your expenses exceed your monthly income. Which means you’re overspending. Also, that means you borrow money to meet ends. Borrowed money equals debt that can get out of control.

Can you change that? How?

If you cut your expenses all at once, you may feel overwhelmed.

You may give up before you even start budgeting and paying off debt. And that will only lead to repeating the process mentioned above (overspending equals debt).

But here is a way of what you should do to break overspending. Gradually reduce your spending.

For instance, if you order take-out three times a week, then charge it twice a week, etc. You can continue by making a grocery list and sticking to it. Make it a rule: you will not enter your local discount market without a grocery list. It also means to cook more often at home. With meal planning, you can save money and eat healthier on a budget.

Then, move on to buying clothes only on sale or secondhand. Ultimately, it’s up to you.

But don’t stop there.

Before you get out of a room, turn off the lights. You can then continue with changing your regular light bulbs with LED light bulbs, which last longer and also save more energy.

And why stop with these examples? Get creative and find other ways to reduce your expenses.

That is how you free up money you can put towards your debt.

So, reducing your expenses will help figure out how to pay off debt asap.

5. Change Your Bad Money Habits

Or, in other words, transform your poor money habits into good ones, as bad money habits lead to debt.

Yes, you read that right.

But you can break your bad money habits and build good ones. All it takes is a bit of planning on how you should spend your money. You won’t make it right from the start, plus it may take time, but you can – and should – change your bad money habits.

Give yourself enough time, and little by little, you can create good money habits, alongside figuring out how to pay off debt asap.

But don’t rush yourself. That is the enemy that’ll destroy any progress. Remember to be consistent and persistent and never give up.

Money habits are habits. You can get into a habit of spending money without giving it a second thought. And you can get out of the habit of spending too much money on unnecessary things.

Yes, believe it or not, you can change your money habits. You only need to put your mind to it.

But what can create awful money habits? Well, all those impulse purchases, shopping to impress other people and even when using your credit card way too much.

Buying items to impress people with what you have won’t take you anywhere, at least not financially.

It’s better when people accept you for who you are and not for what you have.

Also, if you use your credit cards way too much, start using debit cards or, better yet, cash.

Read more in the next section.

6. Start Paying With Cash

But why pay with cash when you can pay with a debit card? You can pay with a debit card – it’s more convenient – and it’s your money, as opposed to a credit card, which is the bank’s money.

But the benefits of using cash may not be endless, but they have long-term positive consequences.

When you hand over actual banknotes, you think twice before you purchase the item. And, hand-giving money to the merchant will make you think twice before going into the store and making a purchase.

Paying with cash is a good fit for the envelope budgeting system, which is my favourite budgeting method. It just makes sense and helps me stay on track with my finances.

However, you don’t pay for everything in cash.

For instance, when you shop online, you pay with your debit card. Or when you pay your utility bills online (like I do).

One recommendation: don’t pay your utility bills with your credit card.

In both cases, I keep track of where my money went. And you should, too. You can track them in a spending journal instead of writing them on a piece of paper, which you can easily forget about.

Paying with cash may be overlooked, but it shouldn’t. I use it as much as possible. Usually, I don’t carry around too many banknotes, and I take with me as little as feasible or the amount I need for the day (usually a low amount).

Remember, establish a habit of paying in cash as often as possible. Try to carry a low amount with you. For big purchases, pay with a debit card.

Change your poor money habits so you can understand how to pay off debt asap.

7. Live Below Your Means

I can hear you thinking, there’s no way you’ll ever do this because you don’t want to live cheap or frugally.

Living below your means doesn’t mean to restrict yourself from spending money. Instead, it is one of the ways how to pay off debt asap and gain financial freedom.

As for the part, ‘I don’t want to live cheap or frugal’, you can always turn to a minimalist sustainable lifestyle.

If you’re living beyond your means, it means you’re making impulse purchases and spending money on unnecessary items. To support this lifestyle, you borrow money from the bank. This borrowing leads to debt, and debt leads to financial instability. Sooner or later, you’ll have to pay it back, because that’s not your money.

So, that’s why you should live below your means, which means to live on less than what you earn. It’s completely doable and achievable to live on less. And this also means you rely only on your hard-earned money.

The key to living below your means is to create a budget which reflects your income and expenses and stick to it. If you successfully manage to stick to your budget, you’ll avoid making more debt, and you’ll start to pay it off – as already mentioned above.

So, you put money toward paying off debt asap. Once you are debt-free, you put money aside for an emergency fund. Then, for your retirement and any other financial goal you want to accomplish.

Remember: living above your means equals overspending, and that equals debt.

8. Boost Your Income

You reduced your expenses, and that’s it, and that’s how much money you can free up for your debt, which isn’t enough.

But there is also another way – to boost your income.

Besides your full-time job, you can boost your income by working part-time or remote jobs, side hustles, freelance businesses, side gigs, etc. Once you earn it, put that money toward paying off your debt.

So, brush off your skill set and get competitive in the job market.

You don’t have any skill set? No problem.

Learn new skills by taking courses – both online and in-person. It’s never, ever too late to do that. Another way to boost your income is by selling your stuff. Declutter your home by selling the items that no longer serve you.

9. Use A Debt Repayment Strategy

Without a strategy for paying your debts, your journey to becoming debt-free isn’t complete.

You can either choose between the debt snowball or the debt avalanche strategy.

With the debt snowball, you can start paying off your debt from the smallest to the largest, regardless of the interest rate.

So, let’s get back to the example above. Now, it’ll look like this:

But with the debt avalanche, it’s quite the opposite. You start with the debt with the highest interest rate to the one with the lowest interest rate. That’s why here, the example above will look like this:

The first strategy gives you quick wins and boosts your motivation. But with the second strategy, you can save money. Also, it can take some time until you see any progress.

You can try both strategies to see which one is better for you.

But it’s worth mentioning that these methods are best if you have two or more debts to pay off.

It is super important to pick a debt repayment strategy when figuring out how to pay off debt asap.

10. Celebrate Small Wins

Paying off debt can indeed feel like a never-ending journey and can be a daunting task at the same time.

But it’s crucial to remember to acknowledge and celebrate each milestone along the way. Take the time to recognize and celebrate your progress along the way.

Whether it’s paying off a credit card or reaching a milestone in your repayment plan, taking the time to reward yourself is essential. It helps to boost motivation and keeps you focused and on track towards your ultimate goal of being debt-free.

So, treat yourself to something special, like a small indulgence or a favourite activity, as a way to mark these achievements.

By doing so, you’ll stay motivated, feel proud of how far you’ve come, and keep the momentum going strong to conquer your debt. It’s all about staying determined and focused. So keep going.

The tips above can help you when you figure out how to pay off debt asap.

Final Thoughts

So, how to pay off debt asap? First, remember one thing: becoming debt-free is no easy task, but with commitment, discipline, and intelligent planning, it is achievable.

Second, you should know that debt is holding you back. It keeps you in the past, agonising over your present and borrowing from your future.

Can you change this? Yes, and the first thing to do is to list everything you owe and their interest rates. Then, move on to making extra money and reducing your monthly expenses.

But to tackle your debts head-on, you can adopt one of the clever strategies: the snowball or avalanche methods.

So, by taking charge and implementing these clever strategies, you can pave your way towards a brighter, debt-free future. Don’t let debt hold you back anymore; it’s time to take control of your finances and work towards financial freedom.

Was this helpful? Let me know in the comments below. Also, make sure you don’t miss out on clicking those like and follow buttons on Facebook. And while you’re at it, don’t forget to hit the follow buttons on Instagram and Pinterest, too. It’ll keep you updated and in the loop with our latest posts.