Smart Ways to ACTUALLY Pay off Debt

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Not a week goes by that we don’t find an article like this one. They’re quite common – stories of “ordinary people” paying off massive debt and making it sound easy and painless. They’re marketed as inspirational advice, as if anybody could do it if only they “saved smart” and “made tough choices” and lived out other catchphrases and buzzwords.

(Seriously, just Google the words “this couple paid off” and watch more than 88 million results pop up.)

Of course, if any of these articles were accurate, everybody would have followed their advice years ago and the U.S. public wouldn’t be in collective debt to the tune of $13.62 trillion.

What these stories always fail to take into account is this one simple, unavoidable fact: Before you can pay thousands of dollars of debt, you have to have thousands of dollars to spare.

On top of that, they place ridiculously unreasonable expectations upon the readers. Some of the worst include:

  • Move to a new city to take advantage of a lower cost of living (as if you don’t already have a life where you are).
  • Rent out your house and move into something cheaper (as if you can simply buy another house in order to rent out their existing one).
  • Take on a side hustle (as if time is an infinite resource and you’re not already working multiple jobs).
  • Cut out luxuries (as if you have enough luxuries in your life that cutting one or two of them would make a difference).
  • Live off of a fraction of your income (as if you’re not already living paycheck to paycheck, spending every penny you earn just to survive).


The unfortunate fact is that the system is rigged against you…but that doesn’t mean you can’t beat it. You just have to get a little creative, and change the way you think about finances.

Win Small Victories Quickly

Let’s say you have two credit cards that you owe money on. Most people would tell you to pay off the one with the highest interest rate first (because the compound interest builds up and adds more to the debt and blah blah blah…).


Pay off the one that you owe less on.

If you owe $5,000 on one card and $1,500 on the other, pay off the $1,500 debt first. It will take less time and free up that monthly payment to be applied elsewhere (like that other credit card).

That’s actually one of the biggest and best pieces of advice that we can give, because not only does this allow you to keep more of your income for other things, but it can significantly improve your credit report too. Having an open line of credit you stay current on, while slowly paying off the other card’s higher amount, decreases your overall debt and paints a picture of responsibility and consistency. And let’s face it, in many of life’s situations, your credit report is often the first impression you make (which is just really unfair, isn’t it?).

So pay off your debt faster by getting the smaller ones out of the way first. In the meantime, you can…

Keep Living Like You’re Broke

…until you’re not broke anymore.

One of the biggest pitfalls that people succumb to when paying off debts is that they start to spend the money they’re not applying towards bills. It’s perfectly understandable, and you should reward yourself (more on that shortly), but if you ever want to truly get clear of your financial problems, you have to continue to live as if you were still just barely scraping by.

So when you pay off one debt, use that additional income to pay off another.

Freeing up one or two payments that you can then put into another debt means that you’ll pay it off in a fraction of the time, which means less in interest payments (like the fancy advisors always like to talk about). And, since you’ll feel great from being so financially fit, don’t forget to…

Reward Yourself

You’re doing all of this for a reason, whatever that reason may be. Whether it’s a new car, a new house, or even just relief from the stresses of struggling financially, you have a plan and a goal and you’re going to achieve it.

So feel good about the little victories and treat yourself.

Don’t misunderstand this and use it as an excuse to go nuts and ruin your progress or undo your victories, but you have to feel good about what you’re doing and you deserve to celebrate a little.

There are lots of ways to treat yourself, and we’re not here to tell you what to do, but one recommendation is to use your first “free payment” on yourself. After all, you’re worth it!

We’ll keep the tips coming in our ongoing series of “Financial Advice for Everyday People,” but in the meantime, sound off in the comments and let us know what has worked for you! We’d love to know how you’ve paid off debts or gotten ahead of your finances, and your advice could make a huge difference to our other readers.

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