Do you have debt that you’re just dying to be free of?
It’s one of the worst feelings, like a cloud over your head, or an anchor around your ankle. You work hard, but instead of saving everything gets rolled right into the pit of debt.
For a lot of people it’s the one thing keeping them from gains every month. Maybe you feel like you can never spend on anything fun without guilt, because you’re net worth is technically still in the negative digits.
Debt is something that Millennials are dealing with now, even more than the generations before. If you’re in your 20’s, like me (I’m 24), going the college route will now leave you 5 or even 6 figures in debt as soon as you graduate.
You get to not just hustle to start your career; you get to hustle just to break 0. And it gets even worse… the longer you take to pay it off, the more it grows, and the more you pay in the long run.
I get that. When I graduated from college, and married my wife Renée in the fall, we started life together with a collective $42,000 in student loan debt. This is actually a LOT milder than what many people go through. The average individual college grad in the late 2010’s has over $37,000 as an individual.
But the good news is, debt can be defeated.
As of April, 2019 we paid off the full $42,000. It took us only 19 months.
And the best part? It’s not as hard you think.
Here’s the best ways we used to pay off debt fast, broken into 5 parts.
1. Prioritize It
This is a little more complicated than it sounds. Saving, like paying off debt, is ALWAYS extremely important. I will always recommend investing in your retirement, and other dreams, as early as possible. I’m not a fan of delayed action, unless it’s absolutely strategically necessary.
There are a lot of different opinions on whether it’s smarter to save money, or pay off debts. Generally, though, prioritizing your debts first will be your best bet.
The Motley Fool blog, (which I recommend for some investing tips), breaks this down pretty perfectly.You have a guaranteed return on investment by paying down your student loans, while your saving investments usually have more variables.
Instead of spending money in a lot of different areas and investments, make destroying your debt your main investment. Once that debt is gone, everything beyond that is pure, unhindered gain.
Focus all of your spare change on just beating it down. That’s the best way to pay off debt fast.
Disclaimer: paying off student debt fast is not always the smartest option for EVERYONE. Here are some financial and credit tips to keep in mind when paying off student loans, courtesy of my friend Charles over at Credit Donkey – Should You Pay Off Student Loans Early?
2. Keep Your Expenses Trim
This mostly means to just live within your means. If you are living paycheck to paycheck, you need to adjust your lifestyle. Period. There is no reason to ever live paycheck to paycheck. My wife lived a year after college being paid $800 a month and still SAVED money every month. She found an apartment for under $600, found 3 housemates to split the bills with – whatever it took.
Whatever your current income level is, you can still beat debt. There are ways of trimming down every expense, to keep everything as slim as possible.
One of the biggest ways to do this is just to save on household expenses. Check out related guide: How To Save On Household Expenses
Here are the top 7 things I do to cut down my expenses by thousands and thousands of dollars every year…
Groceries are one of the most constant expenses in life. It’s easy to spend a couple hundred dollars every month on groceries, and that’s just for 2 people. With more family members, groceries can cost even more.
In addition to bargain hunting, and coupons, I use an app called Ibotta to get cash back on my household expenses. Here’s a detailed review of how it works.
It’s really pretty simple; every month the Ibotta app has hundreds of grocery items they give you money back for (cash, not points). $0.50 for milk, $1.00 for cereal, $3.50 back for migraine pills; you name it.
I save at least $20 every month by using this, or $240 every year. That’s $240 off of your loans.
Dosh is another free app, and it’s even easier to use than Ibotta. Link it to your credit or debit card, and whenever you shop at a participating store, it automatically hands you some cash back.
It’s totally passive, and even though it only gives you pocket change, it can add up fast. And it takes absolutely no effort.
– Fuel Rewards Programs
Make sure you ALWAYS check if your local gas stations have rewards programs. Gas is a significant monthly cost. My Shell Gold Rewards program, which is totally free and card-less, gives me at least $0.05 off per gallon at every fill up. It often gives me $0.10 or even $0.15 off per gallon.
This may seem small, but it saves me a couple hundred dollars every year by doing absolutely nothing except joining.
More money to pay off debt.
– Credit Card Rewards
Credit cards can be a double edged sword. If you aren’t a smart spender, or if a credit card tempts you to over-spend, it can actually create MORE debt for you. If that’s the case, you’re better off just using a debit card.
But if you spend carefully, credit cards are one of the best things. All of your expenses should be on it, because credit cards ALSO tend to offer cash back programs.
I’ve never been late on a credit card payment in my life, so I use it for all of my spending. My Chase Freedom card offers 1%-5% back on ALL of my spending. It doesn’t take long for this to add up to a few hundred dollars to transfer into my bank.
It’s a great way to make back a bit of what you have to spend
If you ever shop online, even once, you’re absolutely wasting money if you’re not using Ebates. It’s like lighting money on fire and watching it burn, or knowingly over-spending on something for no reason.
Ebates is a website that gives you cash back on everything you buy online. It has thousands of participating stores, so it’s almost hard to find a store that DOESN’T offer money back. It may be as little as 5%, or over 50% of your money back.
They send you a check in the mail every few months with the amount you get back on your shopping.
3. Don’t Over-buy
This is essentially the same thing as living within your means. Don’t buy or rent things that are more expensive than what you can afford. If what you can afford is the most basic apartment, then make the best of that apartment.
Do your homework when looking for housing. You may even need to ask some of your connections if they know of cheap accommodations, because not every rental option is listed on Zillow. It’s normal to want a beautiful apartment, or better yet a house, but it’s the worst idea to pay extra for one before your debts are paid off.
The same is even more true with cars and motorcycles. Having a nice car, or motorcycle, is a great way to reward yourself after debt. It’s NOT a good idea during debt. Cars are a bad investment at the best of times. It’s a basic necessity, but upgrading before you’re ready is a terrible financial choice. A used, functional car is always better when you’re paying off debt fast.
4. Develop Some Free Hobbies
Going out and having fun can be super expensive. Let’s face it, there are a lot of fun things that cost money. My wife and I love going to Broadway shows in Manhattan, eating out, frequenting coffee shops, traveling, concerts, movies, motor sports, and a million other things.
But when you’re trimming down your budget to pay off debt fast, you need to find some cheaper activities. There are almost ALWAYS local activities and adventures to be had that don’t cost a penny. Discipline yourself to find some fun activities to replace the ones that cost money, at least for a while.
Search Pinterest, or check out this blog post from The Simple Dollar on some free activities to fill out a fun weekend.
5. Make More Money
Crazy, right? The idea that making more money will help you out of debt faster? This might seem ridiculously obvious, and easier said than done, but there are DOZENS of ways to make extra cash without a job.
I’m not talking about just finding another job that pays more. That isn’t always an option. Instead, there are dozens of things that you can do (mostly online) to make hundreds or thousands of extra dollars every month. This is how my wife and I have wiped out $42,000 of debt in less than 2 years.
Here are the exact things that we’ve personally done to exponentially increase our income flows:
If you have the energy to teach English to little Chinese kids, than teaching through something like VIPKid is a PERFECT fit for you. My wife works with a company called VIPKid, and she makes a full time living teaching online.
You have the freedom to choose how much, or how little you want to work, so it gives you the flexibility to fit this in as a side gig. She started at $19/hour, so it can be a decent way to make extra cash! VIPKid is the one we use, but there are many other options. Just be aware: VIPKid (unlike some others) requires you to at least have a degree, though no experience is required. And it can be tough to find an ideal time to do classes because of time zone differences. With your students being in China, most ideal class times are in very early morning hours.
– Affiliate Marketing/Blogging
Believe it or not, there are people out there who are making a full time living through blogging. It can take a lot of work to learn, and succeed at, but the income rewards for people who stick with it are MASSIVE.
Affiliate marketing on a blog is pretty straightforward. Create a website, write a blog on the website, promote company’s products on the blog, and get paid commission whenever people buy stuff through your links. I got my start in affiliate marketing with Wealthy Affiliate, which I would recommend to any beginners.
There are Wealthy Affiliate users making $6,000/month, $10,000 per month, and even 6 figure months. It takes more effort, time, and patience than some of these other options. But it’s a great side gig to start as a long term investment, with high ultimate pay offs. Give it a shot!
One way I found to make hundreds of extra dollars every month is through freelance gigs. Once again, my wife and I work as a team on freelancing gigs.
Through marketplaces like Upwork, Hubstaff Talent, Fiverr, and Freelancers, I’m able to snag freelancing gigs that provide 1 time opportunities. They often pay much better than traditional employment too.
I’ve been hired by brands to create logos, and been paid $50 for 20 minutes of work. Written blog posts for $30/hour. My wife has illustrated a book. We use opportunities like these to bring in a lot of extra cash, and pay off debt fast!
If you’re curious about how to find those freelancing gigs, and the best way to secure them, check out this guidence post I wrote for you!
Rev.com is a transcription site. Rev, and many others like it, offer freelancers an opportunity to listen to audio files, and get paid to type what you hear in the audio files into written form.
It’s pretty easy work, and as long as you’re fast at typing, and listen well, you can make a good amount of extra money with this. Apply to be a freelancer with Rev, and if you pass the test run that they give you, you can pick up as many transcribing jobs as you want.
This is an easy and totally flexible way to make some extra money.
– Selling Online
You can sell a million different things online. Whether it’s through your own Shopify store, or through online marketplaces like Amazon, Ebay, and Etsy, you can make a fantastic income flow through selling physical products online.
I have friends who are making more money than orthopedic surgeons, working half the hours, by selling items on Amazon and Shopify stores. My own Shopify store brought in over $500 in sales within 10 hours of my launch (I sell t-shirts, coffee mugs, and stuff like that).
There are a few tricks to making money on Shopify, but I can assure you that the money making potential is huge. Just be aware that, similar to affiliate marketing, creating a lucrative brand with physical products takes a lot of effort. The perseverence and strategy that it takes to succeed aren’t a level of drive that everyone has.
If it sounds like something you can do, it’s one of the best ways to make money online.
YOU CAN DO THIS TOO!!
I can’t say this enough. There’s nothing stopping you, except for your own self doubts. I battle through things like clinical anxiety, and a lot of other obstacles – I’m sure that you have many of your own hurdles to overcome! But you can destroy your debt.
A few frugal habits, a few money saving options, a few new income sources and you’ll be debt free so fast it will make your head spin.