5 Steps to Paying off Debt Fast

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Do you have debt?

Even if you don’t run up a lot of credit card debt, you probably still have some. If it’s not a huge amount, sometimes it is easy to just ignore it. BUT, did you know that you could save yourself thousands of dollars in interest if you would just pay some of that stuff off early?

Hubby and I have never had much credit card debt. However, we both have student loans, a truck loan, a mortgage and used to have a balance on a card we used for remodeling.

One random Summer day I decided to take my Mom’s advice and look at Dave Ramsey’s Total Money Makeover. At first I just skimmed through it on the couch. A few minutes into it I jumped up, grabbed my laptop and a notebook and dug in for the long haul. Dave Ramsey knows his stuff!

I decided then and there that I was finished with this debt trash and Dave was my new best friend.

Of course, getting out of debt is not an overnight thing and we aren’t completely there yet. But, I’m so relieved and happy to say that we are well on our way to being debt free.

We paid off $17,000 The first 12 months we followed Dave’s advise. That included one of my student loans, a Home Depot credit card and a few other random things.

We do NOT make a tun of money. Don’t get me wrong, we are blessed, but I don’t want you to think that we are rolling in the dough and paying off $17,000 was nothing for us. Its a big deal, a HUGE deal. There is nothing like getting a statement in the mail that says, “Paid In Full”!! It just makes my heart so happy. Its a HUGE relief!

Update: In 2016 (one year later) we paid off another $12,500 worth of debt! My student loans are gone, y’all!  And we plan to end 2017 debt free (except for our mortgage.) Hallelujah! 

But, enough about us. Here is how YOU can pay off a lot of debt really fast!

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Step #1 to pay off debt: Get organized!

Make a list of all debt and expenses. Now, create a bill ledger, like my example below. (All  amounts have been changed to protect the innocent. 😉  )bill ledger

Step # 2 to pay off debt: Create a DEBT SNOWBALL.

This is key! You will list all of your debt in ascending order from smallest debt to largest. (I know, you would think that you would list them according to interest rate, but don’t.) The plan is to pay these debts off in the order listed, paying off the smallest one first and then moving down the list. As you pay one thing off, the money you were paying on that bill will now be applied to the next bill. See? A snowball affect!  snowball example(I didn’t list our mortgage because it is the largest and I choose to think of it as a whole separate beast.)

Step #3 to pay off debt: Raise $1000 fast.

Ugh, the boring part, but Dave says we have to. You need $1000 in your bank account at all times in case of emergency. I get that, but I was ready to pay stuff off. THAT. DAY. (So, I looked at my bank account and was relieved to find that I had an extra $1000 sitting there with no intentions. Hallelujah! Done! If you don’t have it sitting in the bank. Side hustle as quick as  you can and raise the cash! Have a yard sale. Get rid of stuff on eBay. Sell your plasma (yeah, that’s a real thing). Do what you gotta do.

Step #4 to pay off debt: Build a budget and stick to it!

I LOVE IT! Am I crazy?! Probably, definitely. I really enjoyed figuring out what we spent our money on, how much we should have been spending and how much we could afford to spend. Here is an example of one month.  (These amounts can change each month according to your needs. That’s okay!)Budget example

Step #5 to pay off debt: Pay if off! (Get rid of it, tell it “bye Felicia,” see ya!)

Use all extra money each month to pay toward the top item on your Debt Snowball. Mark the bills off as you pay them off. Before you know it, your debt will be gone!

pay off

It is a really easy system and it works! If you want to set a goal to pay something off really fast, adjust your budget accordingly. Budget less money towards your groceries one month, or reduce your blow money amounts for a while.

I just love Dave Ramsay. Really, he changed my life!

You can do this, too. You just have to decide and commit to it. And, if you have a bad month, budget-wise, that’s ok. Start fresh next month.

Lastly, Lovely Friends, here are a few debt crushing tips that I have picked up along the way:

  • Keep your Debt Snowball in a highly visible place in your home. You don’t want it to be out of sight, and therefore, out of mind.
  • Don’t delete the paid debt from your list. Instead, draw a big ol’ red line through it. Seeing your success will encourage you to keep on going.
  • Get your husband or wife on board, too. Unity is essential for success!
  • Put ALL extra money that comes in toward your Snowball.
  • If you get a raise or a bonus don’t act like it. Put that extra money toward your debt.
  • Side Hustle on a regular basis to help give you extra money to throw at your debt.

Once you get going, its pretty addictive! You should consider yourself pretty savvy for starting this journey. So many people are comfortable living in debt, but not you and me!  Good luck on your journey to financial freedom.

What do you think? Is Dave’s method something you want to try? I love it! Share your thoughts in the comments below!

XOX, Gabrielle

P.s. If you liked this one, you will love these…how to save, save, savings, ways to save, frugal, budget, budgetting success, financial freedom, financial success

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XOXO, Gabrielle


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