5 Proven Ways to Get Rid of Debt

Having personally been in $123,000 worth of debt at one point in my life, I understand the feeling of being “boxed in” and not having a clear vision on how to get rid of all that debt. After 1.5 years, I paid off every penny of debt I had. I went from $123,000 to $0 in debt within 1.5 years.. yes that is correct.. 1.5 years. Below I will provide details on what I did and how I did it from my own personal experience. Hope you find this article motivational and inspiring as you tackle yours.
Below are my top 5 steps to take while getting rid of debt. These ways help accelerate how fast you can get rid of debt so you can be well on your way to achieving financial freedom.
  • Pay the highest interest rate first
  • Take up multiple side hustles in addition to your regular job
  • Live like you did your freshman year of college
  • Allocate your take home bi-weekly income wisely
  • Track your progress and stay motivated!
Why pay the highest interest first?
My first recommendation for those with multiple loans is to pay off the highest interest first, which might not necessarily be the highest balance. Doing so will ensure that you pay the lowest total interest when all is said and done and all the loans are paid off. Also, I strongly recommend putting as much towards your debt each month as you possibly can, even if it means sacrificing eating out and other activities. Remember, the goal is to “sacrifice now and enjoy later”. The definition of “later” is totally dependent on how fast you can get rid of your debt. Being able to contribute more towards your principal today will greatly lower your interest in the future.
Side Hustles
Taking up side hustles was the first thing I did to supplement my regular job and cover daily expenses. My side hustles covered all of my expenses including rent, food, utility bills, car expenses, e.t.c. That way I was able to channel all of my regular income towards paying off my debt. Some side hustles I undertook were tutoring (using frogtutoring) , taking online surveys (using SurveySavvy and Pinecone Research), mystery shopping, and doing simple online tasks using Swagbucks. I will release another blog post where I outline a lot more side hustles you can do to generate side income.
Living below your means
The other part of the equation to increasing your cash flow is minimizing your expenses. Most people only look at generating income but minimizing expenses is equally as important. While paying off my debt, I was able to lower my expenses by cutting cable entirely, eliminating eating out at restaurants, opting to run/work-out outside instead of a gym membership, and putting the lights off when I do not need it as well as stopping online subscriptions that where a luxury to have.
Wisely allocate your income
The biggest struggle and sacrifice I had to make while paying off my debt was contributing close to the minimum needed to achieve the maximum employer contribution towards my 401(k). I struggled with this because investing is never a bad thing, however, it is important to be aware if you are at a peak of the equities market or a recovery since that can sway your decision towards either end. If you believe the market is at a peak and stocks are over-valued then you might be more inclined to paying off your debt if the return you will achieve in the market is less than the interest you are paying on your debt. On the other hand, if the return you expect in the market is larger than your interest, then you might be better off allocating some savings towards the higher return. Being able to predict the market was a difficult task and we were close to the peak of the current bull market so I decided to pay off my interest first.
Track your progress
Finally, it is important to track your income, expenses, and monthly cash flow as well as the balance of your loan to determine if you need to adjust your contributions and where you can cut your expenses to help achieve that. Do not forget to put your yearly bonus from your regular job towards your debt as that helps out a lot!
Final Verdict
Eliminating debt is no small task and it takes dedication and planning to accomplish such task. Being able to get rid of debt early on will be very beneficial for your financial future and put you right on track to being financially free.

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