Paying off debt is not an easy feat, even if the balance is on the smaller side. With all of the shiny things that are dangled in our faces day in and day out, prioritizing debt payoff instead of acquiring it can be challenging. What we’ve found is that making the process fun and as interesting as possible helps. We’ve found that these 5 tricky ways help us speed up the process without getting overwhelmed.
5 tricky ways to pay off debt
1. Increase your payment to get the balance to an even dollar amount.
We do this every month. This is why you’ll usually see that rental property #1 has an even balance. We always round up so that the balance is at a whole dollar amount. For example, if the balance on your target debt is $10, 651.75, increase your next payment so that your balance becomes $10, 500.00 or $10, 475.00. Shoot for an whole number.
2. Make an additional principal payment each week instead of one additional monthly payment.
This is a great way to build momentum. If you carve out funds weekly to put toward the debt, seeing frequent changes in the balance can really be encouraging. Getting those extra weekly wins may just be what you need to up the intensity instead of waiting for the usual once per month additional payment. Of course, this depends on your loan terms, but if there are no penalties to making as many additional payments as you can, chisel away at that principal.
3. Try the live on what’s left approach.
Many of us do the complete opposite. We live and then at the end of the month, whatever is left goes toward debt. Try flipping the script. Instead, calculate how much extra you can pay toward debt for the month. Pay it upfront and then you are forced to live on what’s left.
4. Use whatever is leftover at the end of the month.
After you have done your part and stuck to the budget all month, made all of your extra debt payments, you may even have a little bit left over. Don’t just let it sit there, throw it toward debt!
5. Put any surprise money toward debt.
We’ve made $20 debt payments, $5 debt payments. If it’s money we weren’t expecting, it goes toward the debt immediately. Don’t allow yourself to be tempted with the extra cushion.
It takes conviction, will power and intention to attack debt. For us, setting up new challenges keep it interesting and makes the time go by so quickly. We can’ believe how far we’ve come in such a short time with our debt-free journey. Try adding some of the 5 tricky ways listed above and see how much you can ramp things up.
Do you have any debt payoff tricks or hacks that have helped you in your journey?
With Intention,
Sean and Simone
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I took care of student debt mostly on the backs of bonus income that could well have been spent on a new car or other luxury item. I think it was helpful to visualize debt as part of my net worth. I saw that debt payments increased my net worth rather than viewing them as a reduction of my cash. That mindset really helped me focus knocking it out!
IF, we think that mindset is the most important thing. Whatever it takes to get us to focus and achieve the goal. Once we get past that, the rest comes easier. Awesome that you had bonus income to knock the entire out! Congrats!
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