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Tips for Staying On Track When Paying Off Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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According to the Federal Reserve Bank of New York, debt in America reached $13.21 trillion in the first quarter of 2018, exceeding the record of $12.68 trillion set during the Great Recession. No matter what kind of debt you personally have, whether it’s from student loans, credit cards or medical bills, owing money can feel overwhelming. You look at the bills and can’t imagine what it will take to bring that huge number down to zero.

But, with dedication and a methodical approach, you can do it. We explore how to stay motivated and on track with your debt repayment, and how to avoid a repeat performance.

10 tips for staying on track when paying off debt

#1 Design a debt repayment plan

A great way to stay on the straight and narrow is to define attainable goals you can work toward. For example, try out the debt snowball method. This method involves ordering debts from lowest balance to highest balance and tackling the smallest debts first. Because you’re focusing on the small debts, you will start racking up early “wins,” and that positive momentum will give you the fuel you need to keep going as the debts get bigger and bigger.

#2 Set it and forget it

Based on your budget, determine how much you can afford to pay each month — paying more than the minimum is ideal — and set up auto withdrawals. This gives you one less thing to worry about, and it could make you less tempted to skip payments or pay less.

#3 Pay on time

Don’t let your loan balances overwhelm you to the point of inaction. Paying something toward your debts on time is better than paying late. On-time payment history is the single most important factor that contributes to your credit score. “Although paying extra against a principal balance can help reduce the amount of interest you pay on a loan overall, if there is nothing else you do, just pay on time,” said Mike Fanning, head of MassMutual U.S., an insurance and financial services company.

#4 Trim the fat

If paying even the minimum is difficult, you might have to make a temporary lifestyle change to reduce your spending. Take a look at what you’re spending your money on and see where you can cut back. It could be as simple as forgoing a monthly car wash and scrubbing your own car for a while, or planning grocery shopping in advance so you avoid last-minute, takeout charges. The thought of getting back to the car wash could motivate you to pay your debt off more quickly.

#5 Identify your triggers

Do you end up with a hefty bar bill when you go out with friends every week, or purchase more than you intended when you visit the mall? If this kind of overspending is putting the brakes on paying off your debt more quickly, identify the trigger, i.e. the bar or the mall, and find ways to avoid them. Perhaps you invite friends to your home instead, or establish a moratorium on the mall.

#6 Find a partner in crime

There is safety in numbers. Find a friend or relative who also has debt, and make a date to check in every month. Knowing that you have to answer to someone regularly can help prevent you from slipping. If you don’t know someone personally who can provide that support, there are online accountability groups that can help. Facebook, for example, has become a destination for many budget-conscious consumers to share their experiences and provide tips and support for one another.

#7 Create a debt bet

Do you like healthy competition? You may have heard of diet bets, where several people put money in a pot and the person who loses the most weight wins the pot. Create a “debt bet” with a few friends with comparable debt and similar salaries, like your crew of first-year doctors paying off their medical school debt. The person who pays off the most in a set period of time, wins the pot.

#8 Refinance

Improving the terms of your loan can shave money and time off your repayment. Before you shop for another loan, use a loan calculator to get a sense of how much you’ll be paying over the term of your current loan, and then look for something more favorable. See what your current lender has to offer, but look at other lenders as well.

#9 Consolidate with a loan or balance transfer

If you’re paying off multiple loans, you might want to consolidate your debt. You can apply for a debt consolidation loan, which is a fixed amount of money borrowed at a fixed rate over a fixed period of time. You can then use the proceeds to pay off existing debts, leaving you with just one loan balance to worry about moving forward and hopefully one with a lower rate.

A balance transfer can be a good option if you have good credit and can qualify for a solid 0% intro APR offer. This method is only useful for credit card debt, however.

#10 Forgo gifts

No one wants to skip birthday and holiday gifts, but during your debt repayment period, ask people to help you pay off your debt in lieu of gifts. To make it easy, set up a GoFundMe (or similar) page where people can contribute and see the positive effect they are making. Your family and friends will be impressed with your resolve, and they may even spend more than they usually would to help you along!

How to keep debt at bay — for good

Create a budget

If you didn’t have a budget before, create one now so you stay on track. Budgeting apps, like Mint, You Need a Budget (YNAB) and TOSHL Finance are three of our favorites. You can connect these apps to many of your accounts so the information automatically updates, which streamlines and simplifies the process, making budgeting much less of a burden than with the manual spreadsheets or Excel forms of old.

Don’t rest on your laurels

Now that you’re out of debt, it’s easy enough to start living high on the hog with all this “extra” money. Nick Holeman, CFP at, recommends that you start saving instead. “Don’t get too comfortable after you’ve paid off your high-cost debt – continue to make saving a priority by building a safety net,” he said. “Saving three to six months’ of living expenses will ensure that if you have a financial emergency, you will be able to navigate those difficult waters.

Avoid comparisons

Holeman also suggests that paying attention to how others live can be counterproductive. “Don’t compare your standard of living to those around you,” he said. “If you try to keep up with the Joneses, you will put yourself into more debt.”

Be careful with the plastic

Pay off your credit cards in full every month but to be prepared to stop using them if you are overspending.

We know tackling your debt can feel like climbing the world’s highest mountain (and not in a good way), but it’s all for a good cause. If you stumble along the way, get up, dust yourself off and keep on trucking. Being debt-free will one of your proudest accomplishments.

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8 Inspirational Stories of People Who Overcame Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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That escalating figure on your student loan bill or credit card statement makes you cringe every month. You pay when you can, but it feels like you’ll never pay it off. Don’t despair — with dedication, patience and some lean living, you can whittle down the bills. The evidence: Eight former debtors share their stories of triumph over debt.

Success story #1: Set a deadline

J.R. Duren, 39, Jacksonville, Fla.
Payoff time: 27 months

These days, J.R. Duren is a personal finance expert at, but when he and his wife married, they had $22,000 in credit card debt between them. Paying off the debt as soon as possible was a priority, so the couple created a handwritten list of each card and its balance, interest rate and monthly payment. “Doing so gave us tangible evidence of what we were facing, and gave us the motivation and courage to try and tackle it,” Duren said.

From there, the newlyweds created a detailed budget to determine how much money they had left over at the end of the month. “Knowing what you’re earning and what you’re spending is key to paying down debt,” Duren said, “whether it’s $22K or $220.”

After paying down $1,000 per month for 18 months, the Durens were only about halfway closer to their goal thanks to interest rates that continued to drive up their debt. To speed things up, they transferred the balance to a 0% card and used the sign-up bonus to pay off the balance transfer fee. They gave themselves a deadline of nine months and met it. Altogether, it took them a little more than two years to wipe out the debt — 27 months to be exact — but they learned a lot about financial responsibility along the way. “Deadlines are key because they give you a finish line for the race,” Duren said. “Something to shoot for and a tangible end to the fight.”

Success story #2: Absolute discipline

Matthew Burr, 32, Elmira, N.Y.
Debt: $74,000
Payoff time: 24 months

Matthew Burr used a 15-year-old TV, delayed buying a new car and bypassed big cities for his first job in order to pay off his six student loans. He prioritized the high-interest loans first and worked his way down. “I set small goals to pay off one loan at a time, by making multiple payments per month, and kept the interest low instead of allowing significant accrual,” he said. Because Burr had no other debt and his rent was low, he was able to put extra funds, including holiday bonuses and tax refunds, toward the debt. He focused on needs vs. wants, and set achievable goals, but he stressed that the process took serious discipline. He even wrote a book about his experience, “$74,000 in 24 Months.”

Success story #3: The snowball

Ty’Lisha Summers, 32, Houston
Debt: $100,000
Payoff time: 8 years

Ty’Lisha Summers and her husband racked up $100,000 in debt after they graduated college. They became debt-free with the help of a financial planner and the debt snowball method from popular author/radio host Dave Ramsey. The snowball approach is similar to Burr’s — prioritize debt from the highest to the lowest interest rate. “Once the first debt was paid off, we would use the monthly allocated amount and roll it over to the next debt on the list, paying above the minimum required until the next debt was paid off, and then we continued down the list until we were debt-free,” Summers said.

She and her husband began helping other people become debt-free with SpenDebt, an app that adds a set amount to every debit transaction, then sends that money to the creditor.

Success story #4: Using a home equity loan

Katrina McGhee, 37, Minneapolis
Debt: $42,000
Payoff time: 22 months

Katrina McGhee’s MBA left her with $60,000 in student loan debt. Although she landed a solid corporate job right out of school, she initially wasn’t rigorous about paying off her loan. McGhee paid the monthly minimums and applied her annual bonus and tax refund to the balance, but was primarily saving for a big trip. “I had saved up $40,000 and quit my job to travel around the world for 20 months,” she said. Her student loans went into deferment.

Despite earning 25% less at her new job upon her return, McGhee set a goal to pay off the remaining $42,000 of her loan in 22 months. She accomplished this by creating a budget spreadsheet and tracking everything she spent. She paid more when she could — a lump sum every few months and any extras, including tax refunds. “I still traveled internationally and had fun, but I was very intentional about how I spent my money. I made trade-offs and lived significantly below my means.”

Down to about $30,000 in debt, she rolled it into a home equity line of credit and continued to pay aggressively. The interest rate on the equity loan was less than half the rate of her student loans, and it’s tax deductible. Today, McGhee is a certified life coach. She helps others “find the courage to pursue their own unconventional path to freedom, including … financial freedom by paying off their own debt.”

Success story #5: Accountability is key

Danielle Desir, 27, Bridgeport, Conn.
Debt: $63,000
Payoff time: 4 years

When Danielle Desir realized that the student loan interest from her graduate degree cost her more than $10 per day, she was determined to pay it off as quickly as possible. She lived at home with her mom — her “biggest champion” — to save money. “Despite the long commute to work, I kept my living expenses low and made extra payments, which shaved years off of my loans,” Desir said.

She also started The Thought Card, where she gives travelers advice on how to plan and save for their trips. “My blog kept me accountable and helped me connect with other like-minded people who wanted to gain financial independence while pursuing the things they loved,” she said.

Success story #6: Living on a shoestring

Phil, 27, Germantown, Md.
Debt: $30,000
Payoff time: 12 months

Phil moved into his dad’s basement, lived on $500 a month and poured the rest of his $3,000 monthly take-home pay into his student loans. Living rent-free made all the difference. “I did not pay rent while I was paying off debt,” Phil said. “Instead, I added value by being an on-call babysitter for his young kids, cutting the grass, doing the dishes etc.” He also brought his lunch to work every day except Friday, which he called “Yum Yum Friday.”

Today, Phil shares his experiences at Young Adult Survival Guide.

Success story #7: The student mindset

Kevin, 30, Minneapolis
Debt: $87,000
Payoff time: 2.5 years

Kevin’s first step in paying off his student-loan debt was to increase his income with side hustles, including dog-sitting via Rover and making bike deliveries through Postmates. “The great thing is that every extra dollar you earn is a dollar you don’t need, which means you can use it all toward debt,” he said.

Next, Kevin kept expenses low by living like a student. He rented an apartment that was well below his budget and didn’t buy a car. “I biked to work to avoid the cost of a car or parking, or I used the bus on really bad weather days.”

Kevin blogs about personal finance and side hustles at Financial Panther.

Success story #8: Conquering your demons

Jon Dulin, 38, Philadelphia
Payoff time: 1 year

Jon Dulin began accruing substantial credit card debt in college, trying to impress a girlfriend. “I thought, in order for her to love me, I had to buy her things. So I showered her with gifts and dinners out. This quickly led to debt,” he said.

After graduation, Dulin had trouble finding work during an economic downturn. He became depressed. His fix: Shopping. “I turned to buying things, clothes and electronics, mainly. This made me feel good,” he said. He thought that he had everything under control and that he would soon find a job.

In the meantime, he opened two additional credit cards to take advantage of free balance transfers. Dulin initially used only the new cards, but soon was using all of them. It took an “aha moment” for him to realize that shopping only made matters worse.

He sought professional help for depression and for his spending, and started temp work. Taking care of his emotional and mental health helped Dulin focus on his debt. Soon, he landed a full-time job and eventually took an additional part-time gig. He put himself on a strict budget and paid off his debt in one year. His personal experience inspired a blog, MoneySmartGuides.

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13 Ways you Can Improve Your Finances on Your Lunch Break

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If you work full time, you know how hard it is to keep up with all the little things outside of your job. But have you tried putting your lunch break to good use? Instead of spending the hour chatting at the watercooler while you munch on a snack from the vending machine, grab something healthy and use the rest of the time to tackle some important odds and ends — like your finances. Below, we share 14 tasks that you can accomplish over lunch that will help you build a better financial future. 

Pay your budget a visit

Check your budget from time to time so that you can visualize the progress you’re making toward paying down debt or saving. Make it a habit. “This will help you stay on track and help you feel motivated to keep working hard toward reaching your goal,” said consumer finance expert Andrea Woroch. She suggests using an app like Mint, which links all of your financial accounts in one place and provides a real-time snapshot of your spending and saving habits.

Write down your goals

Rather than just thinking about your financial goals, write them down in a diary or on a vision board. “You’re more likely to stick to your budget if you write down your plans and are specific,” said Marshay Clarke, a certified financial planner at Betterment, a financial advisory site. Make sure to revisit your goals periodically to stay on track.

Open a savings account

You’re more likely to save money if you have somewhere to put it. During your lunch break, you can easily open a savings account at your current bank or with an online bank that offers a high-yield savings account. While you’re at it, set up a recurring monthly transfer from your checking account for automatic savings.

Save with ease

There are apps that help you save and take minutes to set up. Dr. Elizabeth Dunn, co-author of the book “Happy Money,” is an adviser for the Joy app and their free FDIC-insured savings account. The app allows users to automatically save extra cash without having to do much extra work. “This is important because just adopting the goal to save money doesn’t seem to change people’s financial behavior,” Dunn said. “But getting a little nudge to save a manageable amount of money can make a difference.”

Other apps that allow you to save incrementally are Digit and Qapital. Digit will recommend how much you should save, based on your spending habits and financial obligations, whereas with Qapital, you create your own saving rules.

Earn more

If cash is really tight, or you want to save for a large purchase, maybe it’s time to pick up a side hustle with Fiverr or TaskRabbit. Plenty of people have been known to use their lunch hours to pick up riders as Uber or Lyft drivers, too. Put those extra funds toward a future goal, like a vacation or down payment for a new home.

Get familiar with your insurance

If something unforeseen should happen in your home, like a fire or a robbery, do you know what you’re covered for? If not, take a few minutes to find out so that you’re not caught off guard should something occur. No insurance? Research policies online over lunch.

Sign up for credit monitoring

Knowing your credit score is important because it can positively or negatively affect your ability to secure a loan, qualify for certain credit cards and, in some cases, get a job. A free service like Credit Karma or Credit Sesame will monitor your score and send you emails if something is amiss.

Think about the future

Use an online retirement calculator to determine if you are saving enough for your long-term goals. If you’re falling short, consider increasing your 401(k) elections from your paycheck, or set up an automatic deposit from your bank account to your investment account.

Also, check your retirement account online and make sure your beneficiaries are in order. It only takes a minute to add a beneficiary and you’ll have peace of mind that your funds will go to the right person(s) should you pass away.

Review your paid subscriptions

Review those subscriptions you’re being billed for each month. You might be paying for things that you rarely, or never use. If those New Yorker magazines are piling up, or you can’t remember the last time you listened to Amazon Music, it might be time to cancel.

Negotiate with service providers

Call your phone or internet provider to see what promotions they are offering. Or, contact your credit card provider about a possible APR reduction. If you have good credit, you might be in luck.

Review your credit card statements

Do you blindly pay your credit card bills each month? Even if you use autopay, you should take a few minutes each month to scan your statements to ensure that all of the transactions belong to you and are accurate.

Get fit

Take a walk or attend an exercise class. Health care is expensive, and the better you take care of yourself, the better your chances of avoiding costly medical bills. Some life insurance providers offer reduced rates to customers who show a certain level of fitness activity on their fitness trackers. Fitness can pay!

Sharpen your financial skills

Skip the digital Solitaire or Candy Crush and read a financial book, like “The Wisdom of Finance,” by Mihir Desai. Doug Kinsey, a certified financial planner and partner at Artifex Financial Group, enjoyed the book so much that he took Desai’s Harvard HBX course, Leading with Finance, which you can complete online. “Another helpful HBX course is Economics for Managers,” said Kinsey. “Either one of those courses will help almost everyone by providing greater insight into how the world works from an economic and financial perspective.”

Clarke recommends the financial books “Rich Dad Poor Dad,” by Robert T. Kiyosaki, and “A Random Walk Down Wall Street,” by Burton G. Malkiel. So take a look at those, too.