To say that Americans are overwhelmed with debt is a vast understatement. Old, young, rich, or poor, many of us find ourselves floundering in debt incurred by mortgages, credit cards, personal loans, bills, and student loans—to name just a few. In fact, last year, the average American owed approximately $92,727—the highest debt level on record. Since you’re here reading this, chances are you’ve got debt too.

While it’s true that debt can easily start to feel “out of control,” making a get-out-of-debt plan is not only possible—it may just be the best choice you’ll ever make. Anyone willing to make the commitment that goes along with this choice is sure to see positive results, even if they have a low income. The good news: it gets easier with time as you get organized and build better spending habits. 

How debt can negatively impact your life

Being in a large amount of debt can be extraordinarily stressful and therefore bad for your emotional health. A full 50% of Americans spend time worrying about how they’ll save for the future let alone pay the bills. Not to mention, financial stress can make it even more difficult to find the focus needed to budget and plan. On a purely logistical level, debt can also make qualifying for loans more difficult. For instance, if you want to purchase a home, most lenders require a debt-to-income ratio of 43% or less. 

You may feel you’re drowning in debt and that hope is long gone, but here’s the thing: the emotional burden caused by debt can actually blind you from finding solutions, and paralyze you from taking action. Know this: getting yourself out of debt can and will boost your health and happiness, because financial confidence boosts morale and opens up better opportunities to save and plan for the future.

How to pay off debt fast

When it comes to paying down debt, we all know faster is better, because a) no one wants to pay off endless interest, and b) the quicker you find yourself debt free, the happier you’ll be. It’s that simple. 

So—how to pay off debt fast? Here are a few tried and true ways of cutting down your debt as quickly as possible. 

Stop borrowing

getting out of debt
(Getty)

Yes, it’s easier said than done. Particularly if this is what got you here in the first place, a little brain rewiring may be in order to help you curb or eliminate your borrowing. Stop using credit cards, taking out loans, or doing anything that will create new debt. Make a promise to yourself to subsist on cash alone while you pay down your debt. You might even go the dramatic route and cut up your credit cards (keeping one for emergencies only) so you won’t be tempted to use them.

Track spending

Understanding where exactly your money is going is crucial to deciding where to make budget cuts. Track all your monthly bills and daily spending for at least a month to get some clearer answers. A few common ways of tracking spending include: using free money management apps, banking app trackers, as well as keeping detailed notes and receipts. Whatever works best for you, make sure it’s a method accessible and easy enough for you to use daily. The tracking will show you where you’re overspending and where you can make cuts.

Make that budget

Using your tracked spending to guide you, find a budget worksheet that works for you and create a budget that takes your needs into account. Since there may be cuts you should make but don’t feel you’d be happy making, it’s important to find a balance you can live with. Start by putting it all in writing, and don’t forget to include a list of your financial goals, as they remind you why you’re doing this, and increase your chances of success. It’s also important to create a budget with enough flexibility to support you in an emergency. At the same time, don’t be too flexible. Depending on your relationship to money, it can be a slippery slope toward wayward spending. Ultimately, the more sacrifices you’re willing to make, the quicker you’ll extricate yourself from debt.

Strategize

Financial experts often recommend two payoff strategies: the avalanche method and the snowball method. The avalanche method entails paying off high interest debt first, while paying the bare minimum on all other debts. Conversely, the snowball approach entails tackling the smallest debts first and paying them off completely, one by one. As you pay off more and more debt, your extra funds snowball, while the amount of money you allot to repaying debt stays the same! Many consider the latter to be a more progressive and empowering approach, but both approaches have pros and cons, so it’s important to do what makes the most sense given your personal situation.

Pay more than the minimum—if possible

Devoting as much money as you can toward reducing your debt each month is the best way to pay off debt fast. Every opportunity you have to make higher payments brings you closer to your goal of being debt free. When you sit down to create your budget, outline the minimum amount  that you’re committing to put toward your debt each month and never dip below that baseline. This amount should represent roughly 20% of your income. That said, if you have a chance to increase that amount—even if just for a month or two—do it. No matter what your situation, do everything you can to pay more than your minimum payment, and you’re sure to start seeing those numbers drop. That’s the dream, after all.

How to get out of debt with no money

You may be struggling to make ends meet with little to no income. If this is you, you’re not alone. But the questions remain: how to pay off debt fast? How to get out of debt with no money? These are valid questions, and ones you shouldn’t be embarrassed to ask. Here are a few strategies specifically catered to a low income situation, but they can be helpful regardless of your income level!

Try to avoid debt consolidation and balance transfers

If you’ve got 99 payments and not enough income, you may have considered debt consolidation or balance transfers to get rid of those extra payments faster. But—it’s important to be very cautious with strategies like these. Debt consolidation loans which lump the balances of multiple credit cards can be an attractive idea, but if you don’t combine it with strict budgeting, lifestyle changes and sizable on-time payments, you may find yourself worse off than before. Not to mention, there can be hefty initial and monthly fees associated with consolidating debt. Likewise, while transferring your credit card balance to another card often comes with a very low introductory rate, it also tends to come with an upfront fee. There are other ways to transfer debt as well, such as using home equity to pay off debt, but this involves putting your home at risk and should be avoided. Instead, you might consider using a debt management plan to make one monthly payment while also gaining access to expert advice when needed.

Request credit card debt settlement

Credit card debt is the only debt that can be reduced with a phone call, and yet most people are unaware of this! Yes, it is possible to renegotiate so that you’re paying a lump sum rather than monthly payments. This is called debt settlement. Get this: all you need to do is ask (and ye just may receive). Simply call up your creditors and request a lower interest rate. If your payment history is good, you stand a chance. If they’re not willing to establish lower interest rates, you might request that they waive some of your recurring fees. Most companies will want to keep your business and will offer you options which, in one way or another, reduce your credit card debt. At the very least, it’s certainly worth a try.

Mistakes people make when paying off debt

Getting out of debt means making payments, yes, but it goes way deeper than that. It often means changing ingrained attitudes, lifelong spending habits, learning to budget wisely, becoming more aware of how much you actually owe and to who, and prioritizing debt payments over other expenses. In other words, there’s a lot going on when you consciously decide to pay off your debt once and for all, and you’ll likely make mistakes along the way—because you’re human. 

Here are some of the most common mistakes you’d do well to avoid!

Not paying off one debt at a time

If you have multiple sources of debt, it’s understandable to want to try cutting them all down at once by paying into each of them monthly. Only problem is, that often prolongs the time you’ll need to spend paying down your debt, and leads to more interest in the longterm. See the “Strategy” section above for better approaches to paying off debt faster.

Not setting aside emergency savings

Life is unpredictable by nature, which is why every home needs an emergency fund. Experts recommend putting 3-6 months’ worth of expenses aside in case of an emergency. And yet, close to 40% of Americans don’t have $400 in the bank for emergency expenses. Even if you’re focus is paying down your debt, it’s important to include an emergency fund in your monthly budget.

Not changing spending habits

We’re human beings, and we love our creature comforts, which means habits are hard to break. But when it comes to learning how to save money, changing your spending habits often means changing your lifestyle too. You may need to reevaluate the stores and restaurants you frequent and the car you drive. You may need to spend more time at home, cook more, and eat out less. You don’t have to go without—it’s just a matter of tweaking your perception. You might allow yourself X “reward” meals out per month—chances are you’ll enjoy them way more than you ever did before!

Not asking for help

If you’re the person in your household who is responsible for finances, chances are no one else in the family knows the financial situation. But if you’re going to be successful, it’s important to be transparent and get everyone on board, working together. Tell them about the debt, share your plan to pay it off quickly, and make sure they all understand they have a role to play. Although it may be challenging to broach these subjects with kids, if handled well, these conversations can equip them with exceptional personal finance skills that may not have learned elsewhere. Keep your whole family involved in the budgeting process: where there is team spending, you need a team effort to get rid of debt.

Not keeping accounts open once they’re paid off

While it’s understandable to want to close an account once you’ve paid off a given debt, it can be beneficial not to because your credit score is reliant not only on how much you owe, but how much credit you have available. In other words, if you have credit available but are not using it, this can nonetheless still improve your score. This of course only works if you can exercise self-control and not build up your debt again.

Not saving for retirement simultaneously

You only have so much money to put aside each month, and you’re prioritizing your debt, so your retirement fund can wait, right? Wrong. The earlier you start contributing to a retirement fund, the better off you’ll be. Try contributing at least 5% of your monthly income to retirement savings regardless of your debt elimination efforts.

Not checking your credit report for errors

Never assume your credit score is correct and doesn’t need verifying. Mistakes are made, so be sure to check your credit report thoroughly for errors or inaccuracies. This is a worthwhile endeavor, as it may affect your ability to buy a house or car—or not. FYI: you’re entitled to a free credit report from each of the major credit reporting bureaus: Equifax, Experian and TransUnion, so take advantage and get one!

Get professional debt help

Fact: it’s possible to get out of debt no matter how unlikely or impossible it may seem right now. It’s also important to remember that how much money you make isn’t everything: plenty of high-income people can remain in debt their entire lives, and plenty of low-income people live with zero debt. If you feel like you’re in over your head and could use some professional guidance on how to get rid of debt, know that there is help out there geared at helping people become more financially savvy and teaching more in-depth strategies for reducing debt over time. You don’t have to figure it out by yourself as there are highly skilled financial coaches able and willing to help you make a sound debt repayment plan that works for you personally!

Bottom line: if you can’t get out of debt, you might need to declare bankruptcy, but this ruins your credit rating and renders you ineligible for loans or credit for years to come. On top of all that, declaring bankruptcy may not affect student debt at all. Really, this should be a true last-ditch option. If you follow the advice outlined here, most holes are not so deep that you can’t climb out of them and land yourself debt free on the other side. And when you do, chances are that building up more debt in the future will be so unattractive that you’ll avoid it at all costs.

Ultimately, living life while deep in debt can have a very negative effect on your wellbeing and your ability to save and plan for a better future. But guess what? You deserve a glorious future, and the best way forward is to pay it forward today.Need some extra inspiration to get started paying off that debt? These money quotes are sure to help prep your mindset. You got this!