If we’ve said it once we’ve said it a thousand times: Being in debt blows. There are no two ways about it. Nevermind that owing money makes it difficult to get ahead. Debt can be downright bad for your attitude and your health. You know, that soul crushing feeling you get right around the first of each month. It isn’t your calendar causing your stomach to churn. It’s your debt.

Sometimes, the stress and pressure of those monthly bills can seem unbearable. Having the weight of debt hanging around your neck is a quick way to leave you feeling defeated, deflated, and depressed.

Even though you can’t see the light at the end of the tunnel, you do have the power to turn your situation around. All you need to get started is a plan. In fact, just a few simple strategies for reducing debt can help you gain control of your money and give you the hope you need to get your financial life back on track.

5 Easy Strategies to Eliminate Your Debt

Getting rid of your debt doesn’t have to mean spending freezes and mountains of spreadsheets. Just using a few simple tricks can help you stay ahead of your bills and start eliminating your debt today.

Stop Borrowing

It may seem obvious, but the best way to start eliminating debt is to stop borrowing. We have a tendency to bury our head in the sand and ignore the facts of our situation. We want to believe that our money problems will disappear if we can earn more, catch a break, or wait it out. So, we refuse to change our habits and continue borrowing money as we always have. Whether it’s putting Christmas gifts on credit cards or getting a loan for a new car, we just kick the can down the road and tell ourselves that we’re going to deal with our debt problems later.

But we never do.

If you want to get out of debt, you have to stop borrowing money. You must break the cycle of buying now and paying later. In reality, debt doesn’t help you get what you want. It holds you back, ties you down, and makes you its prisoner. Imagine what you could do if you eliminated the vast majority of your monthly bills. Imagine how that would feel. The first step to making that a reality is to stop borrowing today!

Understand Your Situation

In order to know the best approach to destroying your debt, you have to know where you stand. You need to know how much money you have coming in compared to how much money you have going out. And, the best way to learn where you stand financially is by learning how to track your spending and make a budget.

I know, I know…it’s the dreaded “B” word. But budgets don’t have to be restrictive or cumbersome. They are simply a tool to help you understand where you’re at financially.

If the thought of creating a budget scares the bejesus out of you, you’re not alone. But, creating a budget doesn’t have to be scary. In fact, we’ve created a step-by-step guide to help you make a budget that actually works! This guide can help take the pain out of creating that first budget. Shameless Plug Alert: If you are more technologically inclined, we’ll even give you an easy budget spreadsheet and expense tracker that you can use for free! Just sign up for our free newsletter and it’s all yours!

Roll it Up, Snowball Style

Once you’ve stopped borrowing and have a good idea of where you stand financially, its time to start attacking that debt. But, what’s the best strategy to pay it off? For me, it’s the “Snowball Method.” Not only is it a great way to pay off debt quickly, it is also a great way to build excitement and confidence through a series of small victories. Here’s how it works:

Your goal is to knock out the smallest debt first, then move on to the next smallest debt…and so on, and so on…until all of your debts are wiped out! Now that you know how much you have coming in, you know how much you can afford to have going out. You’ll pay the minimum payment on all of the larger debts. After that, use your budget and throw any money left over at your smallest debt. Once that first debt is paid off, take the money you were paying toward Debt #1, add it to any money you were already paying on the second smallest debt, and throw it all at that one. Just as a snowball gets bigger as it rolls along, your payments will continue to increase as you roll over debt after debt, building momentum the whole way. Eventually, you’ll knock them all out and breathe a giant (debt-free) sigh of relief!

Refinance It

If all this budgeting and snowballing seems too much for you to take, consider refinancing the loans that you already have. Depending the type of loans you have and their interest rates, you may be able to cut your total monthly minimums down through interest rate reduction.

There are plenty of lenders who offer personal loan options that you can use to pay off your debt. Here some info about one of our favorites:

  • SoFi – SoFi is a great place to refinance your current debt. They offer personal loans ranging from $5K to $100K (minimum $10K for California residents) with no origination or prepayment fees. Fixed rates range start at 5.99% APR* with “Autopay”. Click here for more information about SoFi Personal Loans.

Obviously, if you aren’t getting a better interest rate on your debt, there isn’t a good reason to refinance it. Also, keep in mind that by refinancing your debt, you’re not actually eliminating it. You still have (at least) the same amount of debt to pay back. However, if you are able to secure a better interest rate, you may be able to lower your monthly payments. In order to take advantage of this option, you need to be sure to make extra payments toward your debt. Most importantly, don’t use this option as an excuse to incur more debt! Stop spending on those cards, use your savings to pay your debt off quickly, and use the refinance as a tool to help you get out of debt – not as a way to dig yourself a deeper hole!

Pay Extra

You may not realize this, but paying the minimum payments on your debt is a terrible way to make any progress. Minimum payments are just that – a minimum payment. In fact, much of the time, a minimum payment is going to keep you in debt perpetually. That is definitely something you want to avoid.

For instance, did you know that if you have just $2,000 in credit card debt at 18.99% interest, making a minimum payment of $25/month means that you’ll never pay it off. Yep, you read that right. At that rate, it will never be paid off. #truth

If you do nothing else on this list, at the very least, find a way to make payments that are greater than the minimum that is due. Figure out a way to start paying it down, and get yourself out from under the heavy weight of debt.

You Can Do It!

With some effort and planning, you have the ability to take back control of your life. Your debt may be weighing you down, but the only way around it is through it. Use these tips to start paying off your debt today, and learn what the sweet relief of being debt-free feels like. You won’t regret it!

*SoFi Disclaimers