Pay Off Debt

The Essential Guide for Paying Off Debt Fast (2019 Edition)

Proven Strategies to Become Debt Free!

Today you’re going to learn how to pay off debt as fast as possible.

I’ll go over my strategy of how I went from over $55,000 (USD) in debt to $0 in less than 2 years …and a lot more. My goal is to help you get out of debt in as little time as possible. I understand that not everyone can follow the same exact plan that I used myself. That’s why I’ve included many other strategies that you can hopefully use for your situation.

Get Set for Financial Freedom!

It doesn’t matter if you’re wanting to pay off your credit cards, mortgage, college loans, or any other type of debt. Once you do, you can move towards becoming financially free!

In this guide, it’s my hope that you’ll be able to stay away from bankruptcy, feel like your on solid ground, and feel totally awesome knowing that you’ll never get into serious debt again.

Let’s face it, being at the rock bottom really does suck. If you’re not there, even saving a few hundred a month doesn’t feel like it’s enough when you considering what it really takes to survive during your retirement years.

If you’re living here in the U.S., having a million dollars might seem like a lot, but consider having a nest egg that will pay for costs of living, medical bills, fun during retirement, and then more due to inflation.

How can you enjoy your retirement for 10, 20 or even 30 years without working for a living?

To get to that point, here are…

My Golden Tips for Paying Off Debt and Becoming Financially Independent!

Every success story requires active participation and a level of sacrifice. And so, to achieve financial freedom, dedication is crucial. It isn’t enough to have goals. It’s more important that you work hard to reach those goals.

If you want freedom from all financial burdens, there’s no better time to start than now.

Having Money Does Not Get Rid of Debt!

For most of my childhood, I thought that having a lot of money would fix all of my family’s problems.

Have you ever heard of those stories about people winning millions from the lotto or celebrities making it big, but then end up losing it all?

Why does this happen?

The simplest answer is: mindset!

People that are rich think about money in a different way compared to people that are poor.

I remember reading a book called the “The Millionaire Next Door” by Thomas J. Stanley and William D. Danko which analyzed the habits of over 500 millionaires. One of the key habits was to not spend money on depreciating assets like status objects. So instead of buying a Mercedes or a Lambo, one of the most popular vehicles for these extremely rich individuals was a Ford F-150 pickup.

The same thing goes for living in a neighborhood just to be part of a social class. Being surrounded by a bunch of people that are “Keeping Up With The Joneses” can have ill effects on your finances.

How My Wacked Mindset Created an Avalanche of Debt

When I accumulated over 55K in debt, I was a silly college student. I thought that I could spend a lot because I was going to make a bunch more after I graduated.

During my 1st week of college, I noticed a bunch of booths from various companies – mostly banks. They were giving out schwag like Nerf footballs, Slinkies (huge plastic toy springs), and t-shirts. In order to get this free cool stuff, I ended up signing up for credit cards. I was thinking that I had to build my credit score since I had none.

I signed up for more cards, bought school supplies, and used it for travel and party cash. That was all in addition to the college loans that I pulled out.

At first, it didn’t seem like a lot. It was the first time that I started to pay for recurring expenses. I thought that was the role of an adult. After all, I saw my parents paying off credit card bill, their mortgage, and other debt throughout my childhood.

I was focused on paying the minimum payment. It started off with small $20+ payments, then eventually over a hundred, then it snowballed to an amount greater than my rent.

When More Income Creates More Debt

After getting a full-time job, my cheap college apartment wasn’t good enough.

My used car wasn’t good enough.

My home stereo wasn’t good enough.

As my income increased from $10,400 a year to $56,200 a year, my standard of living was increasing as well.

With all of that debt, my minimum payments increased and so did my interest. I was spending so much on paying off interests instead of the principal.

My mindset didn’t really change until a college friend invited me to a financial workshop. There were 3 big takeaways from that event:

1) Most people that retire don’t have enough money.
2) Most people can accumulate over a million dollars in their lifetime using the power of compound interest (as she had done).
3) Most people make a bunch of financial mistakes because they don’t learn how to manage their finances…even in school.

Number 3 hit me the hardest. I realized that throughout my whole school life, including college, I never understood how to manage my finances. All I knew was that saving was good and that debt was bad. However, I was deep in debt and I questioned myself. “Why am I this far in the hole financially?”

I realized that I had to make a huge change. I realized that I wouldn’t be able to accumulate 7 figures if I continued this path. I realized that I might be one of those poor statistics of not having enough for retirement if I didn’t educate myself to improve my situation.

I thought about this for several weeks and I felt so strongly about getting out of debt as fast as possible.

Even though many of my friends that took out loans for college had a 10-year payoff plan, I realized that I wanted to start creating my golden nest egg for retirement. So I ignored that 10-year plan and settled for a 2-year plan.

Now enough about me.

What Is Your “WHY”?

Why is your “why” so important? Understanding yourself and where you want to go will be your north star. Having this major goal (or set of goals) will help you stay the course in becoming debt-free.

It’s a huge challenge. There will be many things in your way. As you might have noticed in my story, “I” was my worst enemy. I take full responsibility for what I did to myself.

I know that I had parents that were in debt. I know that the school system didn’t teach me about personal finances. However, I know that I’m not a victim. I know that I made my own decisions that shaped my future.

Seeing friends take nice vacations, go to nice restaurants, buy nice cars are all temptations. Instead of being part of that kind of me too movement, what can you do to make a positive difference in your future?

Is there something deep and personal to your situation?

One of my mentors, Tony Robbins, mentioned that there are 2 things that motivate us: pain or pleasure.

For me, it was intense pain! I saw an extremely dark future of not having enough money to have a family, a home, and to retire. It was enough to make me take the quantum leap.

Once you determine your “why,” you must make a serious decision to make a positive difference in your life by eliminating your debt.

“It is in your moments of decision that your destiny is shaped.” – Tony Robbins

As Tony mentions, the decisions that you make will shape your future. Your decisions are really that powerful!

Know What It Takes to Pay-Off Your Debt

I call this reverse-engineering your debt. Before I go into a full financial analysis and monthly budget, you should have a rough idea of how much it will take to reach your debt-free goal.

Here’s some quick math:

Total debt / (Number of Years x 12) = rough amount of each monthly payment*

For my situation, I was $55,000 in debt.

My goal was to pay off all of it in 2 years:

$55,000 / (2 years x 12) = 55000/24 = 2291.67*

So this means that I’ll have to pay at least $2,291.67 a month for 24 months. I say “at least” because that amount doesn’t include interest*.

We don’t need to do any complex financial calculations just yet. This calculation is just for awareness purposes. Before you make a detailed decision, you have to determine if the monthly payment is realistic or not.

For me, over $2000 was a lot of money to pay into credit card debt and school loans each month. I had to figure out how to make extra money just to pay off my bills.

Prepare a Monthly Budget

Have a plan! Don’t worry, it’s not rocket science. Budget preparation is easy! Here’s what you need to do at the start of every month:

  1. Grab a notepad and write down your monthly income.
  2. On the next line under your monthly income, itemize your bills. For example, you would write down your cost of utilities on one line and your rent or mortgage payment on another. It should be something that is due every month. After you write down all of your monthly debt, subtract the total amount of debt from your monthly income.
  3. Keep subtracting by listing down more dues. Include anything paid on an installment basis. How about the car you use to go to work or even your Netflix subscription? Never forget to fulfill credit card obligations. Charges for delayed payments can harm your budget.
  4. Next on the list should be the basic necessities, other debts, and miscellaneous fees. Include other expected expenses such as your kids’ upcoming school projects.
  5. Do subtraction until there is none left to list or if the difference reaches zero.

If you’d like to create a monthly budget the easy way, check out our infoSpike Monthly Budget Calculator here on Google Sheets. All you have to do is enter your values into the spreadsheet and it will automatically perform the calculations for you.

Monthly Budget Calculator
infoSpike Monthly Budget Calculator

Start a Side Hustle

Creating a side hustle is high on my list because it’s the main method that I’ve used to get out of debt. For example: when I was going to college to complete my 4-year degree in engineering, I was told that it would take about 10 years to pay off my school loan. At the time, I was thinking that I would make a lot of money as a professional. So what did I do after I graduated? I made more, spent more, and accumulated about 50 grand in debt. I knew that I had to change my spending habits and pay off my debt fast. So I started my side hustle and ended up paying off my debt in 2 years instead of 10.

So let’s go over what a side hustle is all about!

If you want financial independence, work harder for it. If your current income isn’t enough to pull you out of the debt pit, think of other ways to earn more income.

Find a side hustle or even a second job to generate more income. Put your skills into good use. Can you write? Manage a professional blog. Do you do web designing? Do freelance work in your spare time. Are you good at fixing things? Get yourself out there and offer your services. Take advantage of social media to let people know that you have the skills they need.

Work from the Beach
Side Hustle Idea: Working Online Can Provide Location Freedom

Can’t think of any skill? Then look around and see what ideas you can come up with. Sell stuff that you don’t need, for instance. Do a garage sale. That will declutter your house and earn you some money at the same time. Bake your special cupcakes and accept orders. You’ll be making money doing what you love. In other words, consider any of your interests and create a business out of it.

Yes, side hustles can be very tiring. But once you achieve zero-debt, it can also be very satisfying. It would be even more satisfying when you finally become stable and financially free! You never know…your side hustle could eventually become your full-time gig.Follow the 50/30/20 Budget Formula

This is not complicated math either.

Divide your expenses in three:

  • 50% for very important expenses (e.g. mortgage, basic needs, bills)
  • 30% for wants or “extras” (e.g. the newest cellphone model, costly fitness equipment, a large state-of-the-art TV)
  • 20% for savings and paying-off debts


There’s no need to explain the relevance of the 50% allocation. Why not switch the 30% with the 20%, though, since paying debts should be the priority? Well, you can take money meant for unnecessary expenses and use it for extra debt payments. It is an easier way to get rid of debt problems and give you more focus.

You may use an automatic savings plan to keep tabs on your progress. How does that work?

“You schedule a recurring deposit from your checking account into a linked savings account. How often the deposit occurs depends largely on how often you’re paid and your personal preferences.” (source)

Be Debt-Free By Using the Debt Snowball Method

That is easier said than done. But it must also be your ultimate goal. So, here is another workable step-by-step solution that you can try.

  1. Make a list of all your debts starting from the smallest. Do not mind the interest for now.
  2. Debts have minimums that you can pay off. Do that. Pay them all off except that of the smallest.
  3. With extra money, pay off the smallest debt in full.
  4. With the money first intended for the smallest debt, pay off the second smallest.
  5. With the money first intended for the second smallest debt, which is now paid, pay off the third smallest.
  6. Keep doing this until you’re finally done paying the largest debt.

Follow these simple steps and you’ll find that it is possible to be debt-free (source).

Pay More Than the Minimum

One other way to go debt-free is to pay extra. For instance, if you have to pay $325 monthly for something, try paying $350 instead. That is if you have money to spare or have earned more from doing side hustles. It doesn’t have to be a large extra amount. With the $350 example, that extra $25 may not seem like a lot. However, it’s close to 8% more than what you were paying. Just by paying a little more, you could pay off your debt faster.

Save More For an Emergency Fund

Storm Damage
Emergencies Can Happen When You Least Expect Them

An emergency fund is your highly liquid savings for rainy days. You can use a money market account, a checking account, or a savings account for this purpose.

Think about unpredictable plumbing or electrical problems, even unemployment. Life likes to hit with a sucker-punch, you usually don’t know when it’s coming. So the best way to dodge it is to prepare.

Decide on a specific amount that will be your emergency fund. I would recommend setting a goal for at least 3 months of income. From there, you can start saving 6-12 months worth of income. Be practical and realistic.

A common question that I get is should I wait until I pay off all of my debt before I start saving money in my emergency fund. My answer to this is no in most cases. The reason being is that putting your money into a special savings account will help you build up your money savings habit through goal setting, prioritization, and discipline. Set an emergency fund goal, reach it, and then re-evaluate your situation. Building good habits over time can transform your thinking and your future.

Save Up for Retirement

When I first got started as a financial consultant, I remember a statistic in my presentation. I would ask the crowd – “How much does the average American have saved by the time they reach retirement?”

Some people would say: $500,000, $1 million, or even $2 million. My answer – $10,000. While that answer was given over a decade ago, not much has changed. In 2018, NBC mentioned an average of only $11,700 (source).

Your money today is your future tomorrow. There is no day like today. So many times, retirees find themselves poor, if not penniless, after working so hard when they were still young and very able. That’s because they weren’t wise enough to plan on how they would live once they retire or be forced into retirement.

While a great retirement can be filled with vacations and relaxation, other things can happen as we continue to age. It’s common to see more health issues and medical bills. Having insurance and the retirement funds to pay for future expenses can make your life easier.

Contribute 5% to 10% of your monthly savings to a 401(k) (retirement savings plan sponsored by your employer). Or to any other retirement fund. Let compound interest build your retirement income faster!

Are You Living Within Your Means?

It might sound like a cliche, but living with your means is very wise and sound advice. After all, it’s common sense to not spend more than you can afford, which can get you in dire straits. It is never wise either to take an amount from your already-tight budget to pay for something unplanned. You’ll go broke, that is if you aren’t yet. So do not do this or you better be prepared to suffer the consequences.

To avoid overspending, start by changing your spending habits. Practice logical thinking and self-control. Do not spend on anything that is not within your set budget. Do not touch it, not for anything other than for scheduled payments.

So how do you live within your means? Discipline is key. Think about your priorities. Skip happy hour. Stick to your grocery list, no impromptu additions. Watch movies at home.

If you tend to stop by a favorite restaurant on the way home, have the willpower not to or to find a different route. Cook dinner at home instead. Cook in the morning as well so you can bring your lunch to work. Never mind what others will think. Unless they’re paying for your meal, they don’t have a say in it. Do mind how much better you’ll feel after all your debts are gone.

You can find other ways to achieve wants without hurting your budget. Just stick to the plans.

Manage and Monitor Your Credit Card Usage

Overspending is not something you do, you think. At least, not on a regular basis. Well, it could be something you have not realized yet. And it would be more problematic if you’ve been using your credit card.

Credit Cards
Manage Your Debt By Monitoring Your Credit Card Usage!

Claire Tsosie listed the Signs That You Could Be Overspending with Credit Cards:

  • “You’re falling behind on savings goals.” Overspend and your emergency fund or retirement fund starts dwindling. You must never neglect your savings goals! Emergency funds are particularly important in times of real crisis.
  • “You’re buying out of boredom.” Getting busy is what you do when bored. Unfortunately, your form of recreation is shopping online and/or offline. Find another hobby that doesn’t involve spending too much!
  • “You’re breaking your own spending rules.” Self-imposed rules are like promises, they are often broken. Once or twice is enough. Thrice could still be forgivable. More than that, well, you’re in big trouble. If you have never broken any of your rules yet or if you have broken too many, then STOP. Don’t start, don’t continue. That’s the whole logic behind creating spending rules.

The best way to not overspend with a credit card and avoid impulse buying? Put it away. Keep it in a place where you can’t easily grab it. Use cash when you’re buying anything. Once you’re out of cash, you won’t have the compulsion to swipe away.

Consolidate Your Debt or Use Credit Card Balance Transfers

They are strategies worth trying. Each simplifies finances. It reduces interest rates and monthly payments as well as pays off debt faster..

Debt Consolidation

“Debt consolidation is where someone obtains a new loan to pay out a number of smaller loans, debts, or bills that they are currently making payments on. In doing this they effectively bring all these debts together into one combined loan with one monthly payment.” (source)

That’s why it’s called “consolidation”. Get a loan that’s larger than all of your current loans combined. Then you pay them all by using the larger amount. That way, you’ll have less debt to worry about and you can concentrate on a single loan.

Credit Card Balance Transfer

“A balance transfer involves moving debt from a high-interest credit card to a new card with a lower interest rate, ideally one with an introductory 0% period. Essentially, you’re using one card to pay off another, but because you aren’t paying as much in interest, you have more money available to pay down your debt more quickly.” (source)

Will it save you money? That will depend on the amount of debt and its current interest rate. Other factors are the balance transfer fee, and how long the new 0% period will last. Check whether expected interest will be enough to push through with the transfer.

Unlike the first solution, this one is a bit more complicated. You must learn more about how this transfer strategy works before making a decision.

Look at Compounding Interest Rates

What’s your APR for each credit card or loan? Remember, compounding interests could pose as problems. It is important to make paying off higher-interest debts your priority. The longer you hold it, the higher the interest will go. Don’t wait until it gets so high that you can’t get out of the debt.

Get Help from Experts

It’s not wrong to ask for help. Perhaps friends and relatives would be open to helping you. Unfortunately, they may not have the right know-how to get things done. Therefore, seek out experts who can properly assist in you in dealing with debts.

You could try getting into debt-relief programs. Do understand that they take three to five years. If you don’t have the patience, scrap the idea. No legitimate company should ever promise unrealistic and quick solutions. How to be sure of a company, though? Do your own background check through the local state attorney’s office. The Better Business Bureau should also be a great source of information that you need. Need suggestions for licensed companies? Try credit unions, universities and military bases.

Meanwhile, certified credit counselors are trained to assist and their services are free. They advise solutions such as debt management programs to keep you away from or out of bankruptcy,

“Certified credit counselors – also known as financial counselors — educate consumers on the root cause of debt. They provide tools that help people avoid past-due mortgage payments, maxed-out credit cards and dormant savings accounts.” (source)

Get counselors like those certified by the National Foundation for Credit Counseling.

Keep Paid Credit Card Accounts Open

You reached zero-debt, finally. It doesn’t mean you should close the account. Improve your credit score instead by not touching available credit.

Miranda Marquit explained Why Keeping a High Credit Score is Important:

  1. Good credit score means better chances of getting a loan again. Maybe you won’t need a new loan so soon after paying everything. But there may come a time that you will need one. A good credit score will show lenders that you are a good payer and worthy of lending money to.
  2. You can pay much less in insurance premiums. Insurers use good credit standing to set them. Ergo, good credit translates to less monthly payments. Now, in some states, insurers are not allowed to do this. The good news is, it is allowed in many other states. Check if it is not prohibited in the state where you’re at.
  3. Internet, cable and cellphone service providers check for and prefer credit-worthiness. If they find you not credit-worthy, then don’t expect them to set up service. Of course, in normal circumstances, these things should not be a priority anyway. Still, good credit will definitely help acquire these things.
  4. It helps you better manage resources. As already explained, good credit opens doors to better deals and opportunities. There’ll be lower interest rates, nicer card rewards, signing bonuses, etc.

Having a great credit score has its advantages.

Stay Determined, Focused, and Motivated!

None of these methods are going to work if you don’t, as said, stick to the plan. If you keep going off-tangent, so will your finances be. You may end up even worse than before.


The process of paying off your debt doesn’t have to be tough. Focus on the end goal and get motivated! There are no clear-cut shortcuts either. Needless to say, if you want financial freedom, work hard for it!. Earn it by finding out the best way (or ways) to pay off your debts.

You’ve made it this far! I know that it was a long read and I hope that you found something that you could start applying today. It will demand a great amount of discipline and require many sacrifices. But in the end, the reward — financial freedom — will be all worth it!

This is version 1.0 of my Ultimate Guide to Paying Off Your Debt and I hope you liked it. It’s my goal to improve this over time and make it the best guide on the web! If you have more questions on how to pay off your debt, feel free to contact me.