How to Pay Off Debt
Learn how to pay off debt with our detailed step-by-step guide. Follow our easy instructions to get it done right.
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0 of 6 steps completedStep-by-Step Instructions
1 Step 1: List All Outstanding Debts
Step 1: List All Outstanding Debts
Document every debt: credit cards, loans, medical bills with balances, interest rates, and minimum payments.
Debt Payoff Planner
Workbook for tracking and planning debt elimination
2 Step 2: Stop Accumulating New Debt
Step 2: Stop Accumulating New Debt
Freeze or cut up credit cards, commit to cash/debit only, and address spending habits.
Financial Peace University Course
Dave Ramsey debt elimination program
3 Step 3: Build Small Emergency Fund
Step 3: Build Small Emergency Fund
Save $500-1,000 starter emergency fund to avoid new debt when unexpected expenses arise.
4 Step 4: Choose Debt Payoff Method
Step 4: Choose Debt Payoff Method
Use debt snowball (smallest first) for motivation or debt avalanche (highest interest first) to save money.
Debt Snowball Calculator
Spreadsheet tool for planning debt payoff
5 Step 5: Attack Debt Aggressively
Step 5: Attack Debt Aggressively
Pay minimums on all debts, put every extra dollar toward target debt, then roll payments to next debt.
Budget Tracking App
YNAB or EveryDollar for finding extra debt payment money
6 Step 6: Increase Income and Cut Expenses
Step 6: Increase Income and Cut Expenses
Take side jobs, sell items, negotiate bills, cut subscriptions to accelerate payoff timeline.
Side Hustle Playbook
Guide to earning extra income for debt payoff