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What do YOU want to do?...

Pay Off Debt

Pay Off Debt

Get ready to dig in. Paying off credit cards, mortgages, loans and other debt takes resolve and perseverance. Pay it off the smart way and financial freedom is just a few statements away.

Starting today...

  • Determine how much you can contribute toward paying off your debt

    Add up all your recurring monthly expenses and subtract that from your monthly income. What's left over is how much you have available to divvy up between living expenses (food, clothing, entertainment, etc.), savings and debt. You should consider trimming back on your savings rate in order to increase the amount you're paying on your debt until you're debt free. Find a fixed amount that you'll pay each month and commit to contributing at least that toward your debt.

  • Find your debt-free date.

    Figure out the date you will be debt free if you stick with the same payment each month. 

  • Make a list of all of your debts

    It should include the balance, interest rate and current minimum payment. You need to know where you stand before you can improve upon it.

Throughout the course of this year...

  • Avoid using credit cards.

    The only way to get rid of credit card debt for good is to stop using credit cards. There is no way around it; you must put them away until you are debt free. Cash only.

  • Keep a small cash cushion.

    Don't use all your savings to pay off your debt – keep an amount set aside that could cover any unexpected expense that would normally cause you to turn to credit cards. This will keep you from derailing your debt payoff plan when an emergency pops up.

  • Start with the highest interest rate debt.

    Continue paying the minimum amount due on each debt except for the account with the highest interest rate. For that debt, you'll pay the balance between the minimum payments and the fixed amount you committed to paying each month, regardless of what the minimum payment is for that account. This is how you start the debt snowball.

  • Try to lower your interest rates.

    Start out by calling the bank that issued your credit card and ask them to lower your rate. If that doesn't work, consider transferring your high interest balances to lower interest cards, if possible.

Throughout the years...

  • Don't absorb raises into your spending

    When you are awarded a raise at work, raise your savings level to at least half of the amount your paycheck increases.

  • Stick with the snowball

    Once your highest interest rate debt is paid off, add whatever you were paying on that account to the minimum payment on the next debt with the highest interest rate. When that account is paid off, roll that amount into your payment of the next debt. And so on until you are debt free.

  • Supercharge your savings when you reach debt free

    Once you've made that last payment on your debt, don't just increase your spending. Take the amount you were paying on debt and start saving it. You won't miss it and soon you'll have a great nest egg in place to help save you from having to turn to debt again!

  • Use windfalls to increase your payoff

    Instead of spending your tax refund or other unexpected cash on a vacation or other wants, consider sending at least half of it to the credit card company to accelerate your debt payoff. The more you send the closer you’ll be to your goal!