Need a Debt Payoff Strategy? One of These 5 Methods Could Work for You
Your reasons for being in debt are as unique as you are. Whether it’s because of a student loan, mortgage, credit card or combination thereof, debt can happen to all of us. The good news: The way you pull yourself out can be just as unique (and a lot more rewarding). There are well-known debt payoff strategies out there like the snowball and avalanche methods.
We also rounded up some of our favorite strategies that Penny Hoarders themselves use.
Debt Payoff Strategies
Debt payoff strategies come in all sizes — from ultra-focused intensive to “every little bit helps” methods. Fortunately for us, Penny Hoarders are generous about sharing their ideas. Here are five innovative debt payoff strategies to inspire you.
Our Favorite Ways to Help Manage Your Debt
The right debt payoff strategy can help you say goodbye to your debt, but there are other ways to fast track your progress. From debt consolidation loans to balance transfer cards, here are some other options for managing debt while you find the right payoff strategy for you.
| Offer | What It Is | What It Can Do | Get Started |
|---|---|---|---|
| Balance Transfer | Balance Transfer Card | Transfer the balance from your high-interest cards to low- or zero-interest ones | List of the Best Balance Transfer Cards |
| AmOne | Debt Consolidation Loan | Match you with a low-interest loan | See What Loans You Qualify For |
| National Debt Relief | Debt Settlement Company | Potentially reduce how much you owe | See If You Qualify |
| 0% Intro APR | 0% Intro APR Card | Transfer the balance from your high-interest cards to 0% interest ones | List of the Best 0% APR Cards |
1. Find a Money Buddy
Just because you’re getting out of debt, doesn’t mean you have to do it alone.
Friends Sau-Sha Hill and Sha’Kreshia Terrell decided to work together to pay off their combined $70,000 in credit card debt.
They started by writing down goals they wanted to achieve each month, then holding the other’s credit cards to prevent the temptation of impulse purchases.
Holding each other accountable paid off for them: In just one year they paid off $27,000 of their combined debt. They continue to encourage each other’s new, healthier spending habits.
Check out how an accountability partner can help you pay down debt.
2. Get a Side Hustle
Eventually, you run out of ways to cut costs. You can either resign yourself to a life stuck in debt or find more money.
When former Penny Hoarder staff writer Lisa Rowan added up her total debt, she faced a daunting total of $51,679. But instead of burying her head, she looked for ways to make extra money to pay off her debt. At her busiest point, Rowan juggled two 20-hour per week positions, her own shop, a gig packaging stationery and multiple freelance assignments.
Combining the extra money with strategies like using a balance transfer card and cutting expenses, she side-hustled her way to paying off $30,435 in 18 months.
It’s easier than ever to find a side hustle that works for you. In fact, here’s a list of some of our favorites, all of which you can do from your phone.
3. Round Off Numbers
All those Type A tendencies could pay off when you tidy up your account balances to nice, round figures.
TPH Community member Marlena Montalvo posted that she’s halfway to her goal of paying off her mortgage in eight years. Her secret? A combination of rounding up payments, making double monthly payments when possible and using the 00.00 concept.
So if she checks her balance and it’s $1,581.64, she makes a payment of $81.64 to get the balance to an even $1,500.00.
“Little things like that make a huge difference,” Montalvo wrote.
4. Write What You Spend
Post-It Notes have stuck around for a reason: It’s easier to remind yourself when you see it right there in front of you. The same goes for financial goals.
Tyler and Ashley Philbrook have paid off $6,000 of the $25,000-plus they had in credit card and student loan debt and have put away over $10,000 in savings.
Although they thought they were sticking to their budget every month, it wasn’t until Tyler created an Excel spreadsheet to track every expense that they realized they were overspending every month. They started a budgeting journal to track daily expenses, which helped them see they saved a lot more money by cooking at home.
If you’re new to this kind of thing, the app Cleo can help. It helps you track your spending, set budgeting goals and ultimately save money in an engaging way. Cleo connects to your bank accounts and provides real-time insights into your financial habits.
5. Get Organized With Apps
Paying off debt doesn’t have to be a massive undertaking — sometimes all it takes to help is some common cents. (Sorry, couldn’t help myself.)
If you want to pay down debt in an organized way that doesn’t feel like a lot of work, let an app do the work for you. Another one of our favorite finance apps is Monarch. It lets you track your account balances, transactions and investments in one place, giving you a more complete view of your finances.
Having trouble monitoring your spending? With Monarch, you can track it by merchant or by category. The app also features bill sync, which allows you to see credit card balances, minimum payment due and other recurring expenses within Monarch. And with swipe to review, you can look over transactions with a quick swipe left or right. That way, you always know where your money is and where it’s going. It doesn’t get much more organized than that.
Tiffany Wendeln Connors is a former staff writer at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.
