Debt Payoff Strategies: A Proven Plan to Eliminate $25K+ Debt

No matter the amount, there’s nothing quite like the weight that debt bears.

It can be downright exhausting.

I know the feeling. Just four years ago, my wife and I set out to figure out how to pay off debt — nearly $30K's worth — within the 16 months leading up to our wedding.

The good news was that we weren’t alone in wanting to become debt-free — and neither are you.

Thankfully, what worked for us has worked for others trying to get out of debt as well. Here’s a roadmap of steps you can take to make it work for you, too.

Quick Summary

Resolve your debt in as little as 24 - 48 months.

• Over 600,000 customers and counting
  
• They've helped save their clients over $10 billion
  
• Free credit card debt relief consultation

Visit Freedom Debt Relief In this article

• Money in, money out
• 5 options to pay off debt

Money in, money out

The first step is knowing precisely what you owe. That means sitting down and tallying up all your debt and loan payments — student loans, auto loans, however much you owe the credit card companies, etc.

But there’s more than just knowing how much debt you have — you need to have a clear understanding of your entire financial picture so you can be proactive rather than reactive.

You work hard for the money you bring in, there’s no doubt about that. So it’s important to know exactly where every penny of it is going. Once you start tracking all your spending, you can establish how much you can throw at debt each month.

That’s where budgeting comes into play.

1. Create a budget

A budget is perhaps the single most important tool in managing your personal finances, especially when it comes to paying off debt. It sometimes gets a bad rap, but if you want to gain control over your finances, this is a powerful first step.

It’s not just about restricting your spending when money is tight. It’s also about knowing where all your hard-earned money is going each month.

Luckily, there are plenty of free tools out there to help you track expenses, whether it be a printable planner, a spreadsheet template, or an online budget planner like Mint.

It does takes a little prep work in the beginning to learn how much you spend on average — fuel costs, medication costs, groceries, car payments, etc. — but once you identify your necessary expenses, it will be easier to budget for each accordingly.

My wife and I used what’s called a zero-based budget, which gives every dollar a function so your expenses match your income at the end of each month, equalling zero.

Following this type of budget means if you earn $3,000 a month, you’ll want every expense to add up to $3,000. This includes savings (starting with an emergency fund), investments, charity, and debt repayment. Everything.

If, when you get to the end of the month, you have any money left over because you spent less than budgeted, you throw all of that at your debt as well.