Live Debt Free: The Quickest Way To Building Wealth (2024)

Are you tired of your debt weighing you down? Do you feel like you’ll never get ahead on your debt payments?

According to Debt.org, the average household in America now carries around $140,000 in debt.

That’s a massive financial burden. Whetheryour debtconsists ofa mortgage, credit cards, car loans, or student loans, it’s time to get out of debt fast.

Stop letting your debt control your life. This guide is going to help you live the debt-free life you deserve.

How To Become Debt Free

Are you ready to become debt-free? I figured you were.

After all, that is why you are here right?

Before starting your journey to becoming completely debt-free, we highly recommend starting a small emergency fund, for when life throws you a curveball.

Having an emergency fund set aside will allow you to smooth out those small bumps in the road you’ll hit during your debt-free journey.

We recommend keeping your emergency fund in a high yield savings account that is insured by the FDIC, such as CIT Bank Savings Accounts!

CIT Bank has a high APY, which is one of the highest interest rates you will find for a savings account. This means your savings will grow each and every month.

>> Give CIT Bank a try today!

My favorite part about having our money in an online savings account is that you can’t just run to the bank, and take it out. After all, an emergency is for just that, emergencies.

Most importantly, don’t let your money sit in an average savings account, at a local bank. It’s not doing you any good there.

Follow the steps below, and you’ll be able to pay off your debt fast andachievethedebt-free life you have always dreaming of.

Organize Your Debt

When it comes togetting out ofdebt, the first place you need to start is by determining how much money you owe and who you owe it to. In order for you to pay off your debt, you need to have a clear picture of your financial situation.

I want you to sit down and list out all your debts.

The Debt Tracker in our Budgeting Spreadsheets can help organize them.

As you’re completing this step, I want you to think about your mortgage, personal loans, car loans, student loans, medical bills, and money you owe a cousin.

Whatever it is, if you owe money to someone, you need to put it on the list!

This is going to be a critical step to achieving your goal of paying off your debt.

A few years ago, we found ourselves in quite a bit of debt. We listed it all out just like I told you to do, and it helped us develop a plan to crush the debt.

I promise this method works. We’ve paid off thousands of dollars in debt, became completely debt-free, and we built a six-figure retirement account before our 30’s.

>>If you’d like a FREE budget template to help you organize and track your debt, grab a free copy of our printable Budget Binder below.

Develop A Plan Of Attack To Get Out Of Debt

Now that you have your debts listed out, it’s time to start forming a plan of attack. I use the word attack because that’s what you’re going to do!!

You’re going to get motivated, create a solid plan, and attack your debt until it’s gone.

Debt Snowball

There are many ways to pay off debt. I’m going to share my favorite method, the debt snowball.

The debt snowball is a very simple concept for paying off debt.

You listed out all of your debts. To get started with your debt snowball, reorganize your list of debts from the smallest debt to the largest.

You’re going to attack the smallest debt first.

Use some of the methods listed a little further down in this post to help you pay off that debt.

Once the smallest debt is paid off, you’re going to use the money that would have gone towards that monthly payment to pay off the next smallest debt.

Every time you pay off another chunk of your debt, you use the money that would have been the monthly payment to pay off the next debt on your list.

The reason it’s called the Debt Snowball is that you compound your payments as you pay off more and more debt. This method works, and I highly recommend trying it.

You might have heard of this method of paying off debt in Dave Ramsey’s 7 baby steps. If you want to learn more about this method, check out his book The Total Money Makeover.

Our Debt Snowball Tracker in this Budgeting Tool will help you pay off your debt fast so check it out as well.

Related article: Dave Ramsey’s 7 Baby Steps: What Are They And Will They Work For You

Recommended products:

Debt Avalanche

Another popular method for tackling your debt is called the debt avalanche. In this method, youtackle thedebt with the highest interest rate.

High interest rates can make paying off debt really difficult. If you’re racking up tons of interest on a loan, it might be wise to attack that debt first.

Both the debt snowball and debt avalanche are effective ways to pay off your debt. Make sure you evaluate both methods and choose the best one for your situationwhen you create your plan for paying off debt.

Don’t Try To Reinvent The Wheel

When it comes togetting out of debt,thereare many different ways to do it. The one thing that I want to stress is not to try and reinvent the wheel.

There are plenty of successful ways out there to reach your goal; don’t go trying to create a new method. Find a process that’s proven to work and use that. Maybe you want to use the debt snowball, or perhaps you want to use the debt avalanche, whatever it is, I’m sure someone has a method for it.

Related articles:

• 10 Money Management Tips That Will Make You Rich Before Retirement
• Relieve Your Financial Stress (How To Stop Worrying About Money)
• Create A Better Budget To Achieve Financial Freedom Today

Get Out Of Debt With A Budget

The single most important tool we have used to pay off debt and remain debt-free is a budget. That’s right, creating a simple budget has helped us pay off all of our debt and has enabled us to continue to live a debt-free life.

Creating a budget will help you save more money each month, and allow you to start paying off your debt at a faster pace.

We’ve been using the Cash Envelope budgeting system for years, and I LOVE IT!! It’s a very simple system to use, and I can assure you it works.

The Cash Envelope system is just like it sounds. You do your budget for the pay period with our free printables, and then you pay with cash for all of your daily necessities.

Once the cash is gone, you are done spending until the next pay period.

>>>>If you need more help setting up a budget, check out our totally FREE course on building a budget. This course shows you how to set up the same budgeting system that we used to become debt-free.

Once you have a solid budget set up, you can start saving money and paying cash for things instead of creating more debt.

LEARN MORE ABOUT OUR FREE BUDGET COURSE

Develop Frugal Habits

I’m sure you’ve heard of the term frugal living, but what does that mean??

Now I’m sure the definition changes a little from person to person but frugal living to me is simply being smart with your money. Choosing to live below your means and being content with what you already have.

When you live a frugal life, you’ll save more money. The goal of frugal living should be to reduce your expenses to a minimum, that’s when you’re going to do the most damage on that mountain of debt.

The bottom line isif you want to pay off your debt fast, you have to embracethe frugal life.Here’s how you can do that.

Related article: 50 Genius Frugal Living Tips You Should Adopt To Save Money

7 Simple Frugal Tips to Live By When You Are Paying Off Debt

#1. Live Below Your Means: Let’s keep this simple, look at how much money you make eachmonth, and make sure your spending less than that.If all your bills add up to more money than you make in a month, you have a problem.

#2. Shop With Ibotta: If you’re not using the Ibotta app when you shop, you’re losing out on money. We average about $50 per month in free cashback from Ibotta. Wouldn’t an extra $50 in your pocket every month be nice?? Use our link and grab your $10 sign up bonus today!

>> Check out our Ibotta review here!

#3. Shop At Discount Stores: This is my go-to method for saving money. We do a lot of our grocery shopping at Aldi because it’s a cheap store, and they have a great selection. What about The Dollar Tree? At The Dollar Tree, you’ll find a bunch of great deals on household items you’re already buying. Discount stores are a great way to save money and help you reach your goal.

#4. Grow Your Food: Do you love fresh veggies and fruit? Try growing your own food. This is a great way to save money on groceries and have healthier food in the house.

#5. Be Energy Efficient: If you live in a climate as wedo here in Minnesota, the temperatures outside can go from 95 degrees in the summer to -40 degrees in the winter. It pays to make sure your home is energy efficient. Reducing your energy bill is a great way to have more money left over each month.

#6. Find Alternative Ways To Commute: There’s no way around it; the commute to work can suck up a lot of your budget every month. It might be time to start looking for new ways to get to work. Try carpooling or, if you’re close enough, riding your bike to work.

#7. Make Your Own Cleaning Supplies: Cleaning supplies are expensive, so switch to making your own. A simple Google search will bring up tons of different homemade cleaning recipes. Head over to Morning Chores for a list of great recipes.

Stop Using Credit Cards

You’re here because you want to get out of debt, so why are you still using your credit cards? Your credit card use has to stop if you want any chance of getting out of debt.

Are you used to pulling out the plastic to pay for everything and you’re content making monthly payments on your credit card? If that’s a habit you have formed, this is going to be a little harder for you.

Your goal is to pay off debt, not accumulate more. You need to keep reminding yourself that. To avoid racking up the credit card debt, I recommend leaving your credit card at home, basically hide them from yourself.

If you have multiple credit cards? Cut all of them up, but one. The one you save put it somewhere inconvenient at your house. This can be your rainy day credit card for emergencies until you get your emergency fund set up.

If you put the cards in an awkward spot and stop carrying them with you, you’ll be less likely to use them. Once you stop using credit cards you’ll be able to focus more on paying down your debt.

If you don’t have the money for something you don’t get to buy it. Charging stuff to your credit card is officially a thing of the past.

Related article:Don’t Let These 7 Mistakes Hold You Back From A Good Credit Score

Is Debt Consolidation Right For You

Sometimes you just have too much debt to manage, and you don’t know where to focus your efforts. If you’re reading this thinking that sounds a lot like you, debt consolidation might be an excellent option for you.

Debt consolidation is where you transfer all your debt to a single loan.

The goal would be to movethe accounts you owe money onto a lower interest loan so you can focus on one payment instead of multiple. If the interest rate is lower, that allows you to pay more down on the actual debt and less towards the interest.

If you’re finding the amount of debt you have to manage every month overwhelming, I recommend looking into debt consolidation.

Side Hustle Your Way Out Of Debt

The quickest way to pay off your debt fast is to make more money! With more money coming in you’ll be able to pay down your debt faster.

Making more money at your current job might not be a possibility right now, but that doesn’t mean you can’t start a SIDE HUSTLE of your own!

With somany side hustle ideas out there, it can be hard to decide where to start. Here’s a list of some of our favorite ways to get started making more money.

Last month alone we were able to pull in over $22,000 in one month from our side hustle.

Here are a few ways to make extra money this month:

< Walk your neighbor’s dogs with Rover. If you live near town, or in a big neighborhood this is an extremely easy way to make some extra cash in the evenings, or on the weekends. Go check out Rover here!

< Are you passionate about something you would love to share with an audience? If so, start your own blog today! Go check out our post on how to get started blogging.

< Our favorite (completely free) way to get cashback every time you shop, is with Rakuten! If you are an Amazon shopper Rakuten should be your new best friend. I’m sure you’ll love this cashback site as much as we do. >>>>> Give Rakuten a try!

Related articles:How To Make 200 Dollars In One Day (In Your Free Time)

What To Do With Extra Money

Are you expecting to get a bonus from work at the end of the year? What about a tax return? Honestly, it shouldn’t even be a question of what to do with that extra money.

If you find yourself receiving any extra money, you should be using that to pay off your debt.

When we found ourselves $30,000 in debt, we knew that any extra money we got was going towards paying off those debts. We cut our expenses and used every work bonus or tax return that we got to pay offour loans.

Using the extra money to pay down debt has some benefits. The great part about making extra payments on your debt is that it all goes towards the principal instead of paying off the interest accrued.

Anytime you have extra money, you should be putting it towards your debt.

Don’t Make Your Life Miserable

One thing that I want you to keep in mind while paying off debt, is that life doesn’t have to be miserable.

Yes, you can make paying off debt fun!

There is enough stress that comes with owing people money, don’t create more stress by obsessively focusing on paying it off. You have to make sure you still have fun and maintain some normality in your life.

Saving money is very much like trying to pay off debt, it’s easy to get obsessed with the end goal and forget to take care of yourself along the way. Yes, there should be some sacrifice to achieve your goal fast, but that doesn’t mean you have to make your life miserable.

When you’re trying to pay off debt fast, look for free ways to have fun so that you don’t lose your mind along the way.

Ways to make paying off debt fun:

< Try a no-spend challenge

< Find free things to do around town

< Find new ways to save money each week

< Have a visible countdown to track your debt payoff journey

Related article: 30 Things To Do This Weekend That Don’t Cost A Dime

There you have it. You just learned many different ways to tackle your debt.I hope that this guide not only helps you pay off your debt fast but teaches you to continue living debt-free once the debt is gone.

Remember to stay focused on your goals and create a well-thought-out plan to reach them.

Are you debt-free? If so, feel free to share your tips and tricks below in the comments.

[disclosure]

If you enjoyed this post save it for later and join us over on Pinterest for more tips on living debt-free.

Related articles:

• 10 Steps You Can Take To Organize Your Finances This Year
• The Best Bank To Save Money: Is CIT Bank Really #1
• 6 Crazy Simple Money Moves To Make Before You Turn 30