Debt hurts your ability to invest in your future, because you are using the money you earn today to pay off things from your past. Society encourages us to live in a never-ending debt trap by borrowing for cars, school, weddings, vacations and living beyond our means. Here are 10 strategies to help you become debt-free:

1) Make a budget and stick to it: This will help you track your expenses and determine where you can cut back.

1a) Think of money as a tool, and use your money resourcefully to get rid of debt. Creating a budget will help you visualize where you can cut back spending and where you can apply that money to your debt.

1b) To get started, you can look at old credit card and debit card statements to get an idea of where your money is being spent on expenses, and then figure out areas in which you can cut back. Budgeting with software, websites, or apps can also make budgeting easy to stick with.

2) Consider consolidation: If you have multiple debts with different interest rates, consolidating them into one loan with a lower interest rate can save you money and make it easier to manage your payments.

3) Negotiate lower interest rates: If you have good credit, you may be able to negotiate lower interest rates on your loans, which can help you to pay them off faster.

4) Create a debt repayment plan: Prioritize your debts and create a plan to pay them off as quickly as possible.

5) Find ways to increase your income: Consider taking on a side hustle, negotiating a raise at work, or looking for a new job with a higher salary, to help you pay off your debts faster.

5a) There are dozens of websites online that allow you to browse jobs from the comfort and convenience of your home. It does not hurt to browse jobs, and you may be able to secure a job that pays more.

5b) Additionally, due to technological advances, we are also living in a time where the “gig economy” is more popular than ever, and it has never been easier to pick up a “side hustle” to earn extra cash. Many apps and websites allow you to work on your time, and on your schedule. There are so many options such as dog walking, cleaning, tutoring, being a driver, simple home repairs and handyman work, delivering food, picking up groceries, and helping others move just to name a few.

6) Being frugal can help you pay down debt because by being frugal you are being more resourceful with your money. Being frugal is not the same as being cheap. Being frugal is prioritizing your spending so that you can focus on spending your hard-earned money on paying down debt.

6a) It is important to have an idea of how much you spend on wants vs. needs, such as entertainment or eating out. You need to Know the difference between needs and wants.

• Needs (food, shelter, utilities, basic clothing, healthcare, transportation)
• Wants (Entertainment, Vacations, dining out, the newest tech & electronics, new clothes/ designer clothes, luxury car payments, multiple streaming services).

7) Shop around for cheaper insurance. An easy way to save and cut expenses, so that you can use that money to instead pay down debt, is to shop around for cheaper auto insurance or homeowners/ renters insurance. By just doing a quick comparison online, you can potentially save hundreds of dollars. Other insurance companies are interested in having you as a customer and tend to offer competitive rates.

8) Avoid taking on new debt: Avoid using credit cards or taking out loans unless it is absolutely necessary.

9) Use the Avalanche method to pay off high-interest debt first, you can save money in the long run by reducing the amount of interest you pay overall.

9a) Mathematically, it makes sense to pay off debt first that charges a 21% interest rate, over debt that is only charging a 4% interest rate to borrow money.

10) Stay committed to the debt repayment plan and celebrate small victories along the way to stay motivated.

Two methods to pay off debt are the “snowball” & “avalanche” methods, here are the basics:

Avalanche Method:

• Pay debts from highest to lowest interest rate regardless of balances.
• Prioritizes high-interest debts to minimize interest paid.
• Pros: More financially efficient, saves money on interest and helps pay off debts faster.
• Cons: Could take longer to pay off smaller debts, which could discourage some. It may require higher monthly payments, which could be challenging for those with limited cash flow.

Snowball Method:

• Pay debts from smallest to largest balances regardless of interest rates.
• Prioritizes momentum and motivation from quickly paying off smaller debts and helps tackle larger debts.
• Pros: Boosts morale, builds momentum and motivation, increasing the likelihood of staying motivated. Smaller debts paid off quickly can provide a sense of achievement.
• Cons: Not the most financially efficient method. It could take longer to pay off all debts and cost more interest over time.

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