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Gain financial freedom with these simple yet effective tips (and you don’t have to make six-figures a year to do so)

Learning how to buy a home is just as important as addressing how to tackle debt. The reason I’m contrasting buying a home to lowering debt isn’t because there’s anything wrong with buying a home. There isn’t. But the modern trend is for people to consume with not thought to remove (hence, consumerism).

But the last thing you want to do is end up in a financial mess. So treating yourself with material items is nice (I treat myself with material items sometimes (ice cream… lots of it)), but there are too many horror stories about people being so focused on accumulating things that they don’t give attention to their outstanding debt. The results? More debt (and more stress).

Thankfully, there’s a solution (3 solutions, really) to have both financial freedom and material things.

Money isn’t bad; being debt-free just has its unique perks. So no matter where you are in your financial journey, paying off your debt is not impossible.


Now that you have a strategy, the first step to any debt payoff plan is to understand how much debt you have. You may feel anxious about looking at those balances, but once you understand where you stand financially, coming up with a plan is really just simple math.

List your debts and how much you owe, either by hand or in a spreadsheet like Excel or Google Sheets. You should include both kinds of debt: revolving loans (credit card balances) and installment loans (student loans, mortgage, car loans, etc.).

List your credit cards, student loans, car loans, personal loans, mortgage and any other debts. Include these details for each account:

  • Balance

  • Due date for the monthly bill

  • Interest rate

  • Minimum monthly payment

  • Contact information for the lender

  • Introductory rate or deferments and their expiration dates

  • Your payment method, such as auto pay


Next, you’ll choose a debt pay-off strategy and rank the debts in the order you want to pay them off.

  • Debt snowball: Pay off your smallest debt first (while paying minimums on the others), then roll the amount you had been paying on it into payments on the next largest. This is the “snowball method” because (like a snowball rolling down a hill) you start small and gain momentum over time.

  • Debt avalanche: Pay off high-interest debt first (while paying minimums on the others), then the next highest rate, and so on. It may save you time and money over the course of your debt payoff.

  • Debt consolidation: Combine multiple old debts into a single new one, ideally at a lower interest rate, making payments more manageable or the payoff period shorter. There are a few ways to consolidate debt, including balance transfer cards and personal loans.

  • Debt management plan: If you’re facing a mountain of credit card debt and not making much progress, a nonprofit credit counseling agency can set up a debt management plan to cut your interest rate and put you on a repayment plan.

Related reading(s): Pay Off Debt: Tools and Tips

As you can see, we have options. Depending on your preference, you may use some variation of these methods.

Before I knew much about debt payoffs, I had already begun implementing the Snowball strategy without realizing it had a name. I paid off my smallest debt and worked my way up to my largest debt. It turns out that my smallest debt happened to be the one with the largest interest, while my largest debt had the smallest interest. So I sort of knocked out two strategies in one — the Snowball and the Avalanche.

There are also debt reduction programs that could fall anywhere between the last two options listed above. These programs help you create a formal debt snowball or debt avalanche plan then track your results.

The programs won’t make your debt disappear on their own, but they can help you create a thoughtful plan to pay things down faster or create more interest savings over time.

Everyone has unique circumstances and knows what strategy will work best for them. If you’re unsure, you could always do a trial-and-error for each strategy. The worse that’ll happen is, well, you’ll still be paying off debt. It’s just a matter of figuring out which one works best for you.


Living on a budget is crucial to becoming free of debt, both during the debt payoff process and after. Sure, you probably want to splurge on some things, but the key is self-control. The great thing about practicing self-control is that you’ll be surprised to find that you’ll still have some funds left to treat yourself every now and then.

When you make your budget, you can prioritize extra payments to your debt by cutting unnecessary spending. And after your debt is paid down, you can set a budget that ensures you live within your means and begin to build financial security.

There are different kinds of budgets to choose from, but for those paying off debt, it’s often best to use a more detailed budget approach, such as a 50/30/20 budget. This means you allocate 50 percent of your income to necessities, 30 percent to discretionary spending, and 20 percent to saving.

When you make a budget, start by looking at your current expenditures to see where you can make cuts that are realistic and sustainable. You can assign each dollar a job, including saving, spending, and debt payoff so your budget accounts for all of your income.

Related reading(s): How to Get Out of Debt and Stay Out for Good

Let’s take a look at some areas where people tend to spend a lot, but could probably save with a few adjustments.

  • Clothes/Shopping: Try consignment stores.

Kids grow out of clothes at the speed of light (or so it seems). And let’s be real: It’s not worth it to go into debt for your two-year-old’s ever-changing wardrobe. It’s also not worth it to go into debt because you want that brand-name item first.

Check out your local consignment stores that sell pre-loved outfits (including brand-name items) in good and/or great condition!

If you’d rather shop online, no problem. Sites like thredUP and are great resources to get adult and children’s clothing at a fraction of the cost. This also applies to furniture pieces, home decor, and the like.

  • Cable bill? Nah, Netflix and save.

Welcome to the “future” where you can watch almost all of your favorite shows and movies online. If you haven’t cut that cable cord yet, do it! Put that $100 cable bill toward your debt each month and watch just how quickly your debt snowball starts rolling.

  • Plan your grocery trips.

Don’t we just love food? But sometimes we could get a bit out of hand when shopping, especially if we’re grocery shopping while hungry. You’d think after the first 5 trips, we’d learn. But, hey, there’s room for improvement in everything.

The key to this is to make a grocery list and stick to it! Some people shop each week, biweekly, or once a month. Whatever your schedule, calculate what you need in advance so that way you don’t find yourself browsing the aisles aimlessly, putting anything in your cart.

You could also try ordering your groceries online and then picking them up curbside at the store.

Related reading(s): 27 Ways to Get Out of Debt in 2021;


Paying off a lot of debt isn’t easy but it is completely doable! Stay accountable, find ways to stay motivated along the way, and celebrate your progress.

Recruit a friend or partner who will hold you accountable to your plan and then look for ways to celebrate the wins, big or small. Just finished paying off that small credit card debt? Celebrate with a bottle of wine or a small dinner. Like I said earlier, you will still be able to treat yourself even on a budget.

Related reading(s): 6 steps to kick-start your debt repayment plan in 2021

If you stumble along the way…

Don’t beat yourself. Things happen. It’s also important to accept there will be setbacks during your debt pay-off journey.

For example, surprise expenses may cause you to use your credit card one month. I experienced this when I had a surprise issue with my car. It had to be taken to the shop. And I was out $1800.

At first, it bothered me. Then I realized that things happen. As exciting as it is to pay off debt, money does come and go. And this was a situation I realized was just money “going.” I knew it’ll be back, and because I had a game plan, this “outage” would only set me back two weeks from my goal.

Nonetheless, if you want to avoid these issues, you can always create a small emergency fund to cover at least one month’s worth of your expenses. This can help cover unexpected costs while you pay down your debt.

Related reading(s): THE ULTIMATE DEBT PAY-OFF PLAN FOR 2021