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8 smart ways to pay off debt fast

Do you desperately want to speed up your debt-reduction efforts? Here are 8 smart ways to do so without sacrificing the things you love the most.

By MSN Money Partner Jan 14, 2014 2:50PM

This post comes from Allison Martin at partner site Money Talks News.

Money Talks News on MSN MoneySimilar to a weight-loss plan, paying off debt requires dedication, determination and persistence. Trying to pay it down with drastic measures is not the wise way to go because you can't really get to the root of the problem by doing so.

Don't believe me? Just think about what happens to those who crash diet. Debt reduction works in the same manner; brief bouts of deprivation only make things worse.

Woman using calculator on desk full of bills and statements © Sheer Photo, Inc/Photodisc/Getty ImagesHere are a few smart ways to pay off debt fast:

1. Stop using your cards 

I hear people complaining all the time about how much debt they're in and how they desperately want a way out. My response: Are you still using your credit cards?

The answer is typically yes, which presents a big problem. If you really want to get out of debt, you will have to stop using your cards. The more you swipe, the more the balance climbs.

Having a hard time letting go? Try freezing the cards in a cup of ice. By the time you are able to access them again, hopefully you've changed your mind. And if you feel as if you can't afford to let go because of financial constraints, start by setting up a spending plan and building an emergency fund to get you through those tough situations without having to resort to debt.

2. Pay as much as you can afford to each month

Once you have an emergency fund intact, use any residual funds you have at your disposal to put toward debt, even if it's only a few dollars. The more you pay, the faster you'll get out of debt.

id you save money at the grocery store by stacking coupons with sales? Use the savings to pay off debt. Did you work some overtime last week? And if you find spare change lying around, use that as well.

3. Make cuts to your spending

This may be tough to accomplish, as you'll have to take a good look at where your money is going and separate the necessities from the mere wants. I'm not suggesting that you cut every single expense in the book by 75 percent, because your well-being is of the utmost importance. However, you can go without the daily trips to the local coffee shop or to your favorite lunch spot.

Over time, these savings can add up and dig you out of the hole much quicker than you probably expected.

4. Double up on payments

So you've paid off one credit card? Congratulations, but that doesn't mean it's party time. A small and reasonably priced reward for your accomplishment is OK, but you need to keep the momentum going by allocating those funds that are now freed up to the next balance in line.

5. Use nonrecurring sources of income to pay down balances

As tempting as it is to use nonrecurring income to buy something that you really want, bite the bullet and use a portion of the funds to pay off debt. Tax season is upon us, so here's your opportunity if you will be receiving a refund. Or maybe you're set to receive an inheritance?

Be wise about where you spend your money; completely ignoring the debt to go on a shopping spree is definitely not a wise choice.

6. Freelance to earn extra money

Do you have a talent or skill in an area that people would be willing to pay you for? Try your hand at freelancing to make a few dollars on the side.

In some instances, you may be able to generate a substantial amount of cash, all of which should be contributed to the debt-payoff fund to move things right along, unless you are behind on your bills or you barely have enough money in your possession to meet your basic needs.

7. Tackle those debts with the highest interest rates first

Although some prefer the debt snowball method, which suggests that you pay the debts with the lowest balances first to build momentum, I think it's wiser to get those with the higher interest rates out of the way first. Even if the size of the balances is intimidating, just paying the minimum while you tackle smaller debts and letting the interest grow is not appealing.

But the ultimate goal is to pay off debt, so the choice is yours.

8. Don't sacrifice the things you love the most

Paying off debt may require you to make a few lifestyle changes, but it doesn't have to be depressing. If you have a difficult time adjusting to new circumstances, implement gradual changes so the process won't become too overwhelming.

Do you have any other debt-reduction tricks?

More on Money Talks News:

Jan 14, 2014 4:24PM

If you've found yourself in credit card debt, you should probably just admit to yourself that you have poor financial management skills. It's okay, most people do. Even though I don't agree with the plan logically, I think Dave Ramsey's debt reduction plan is better for people like you. (Suze Orman's interest rate-based payoff plan makes more sense numbers-wise, but takes the discipline that you probabaly don't have).

Dave's plan is simple: Make minimum payments on every debt you have and focus every extra dime you can possibly sum up on your smallest debt. Once it's paid off, move on to the next one, and then the next until they're all gone. He calls it the debt snowball because it accelerates.


Now get to thumbing me down because you're smarter than everyone else and nobody should ever tell you anything because you're a rebel. Have fun.

Jan 14, 2014 3:11PM
One tip Americans need to practice, don't use credit cards to begin with. If you can't afford it, don't buy it! Who cares what you have or don't have but, you. Don't try to impress people who won't be in your life later on.
Jan 14, 2014 5:42PM
sounds like great advice for the federal government
Jan 14, 2014 5:07PM
I wouldn't recommend #7 at all.  The debt snowball process (paying down smaller balances 1st) is better because cashflow is king regarding budgeting.  Interest accrue is minimal compared to overall principle.  Once you pay off the smaller debts easier and first.  You open up more cashflow and you can apply rules 2, 4, and 5 altogether!!!  A snowball truns into an avalanche and you have more money to pay off debt faster! 
Jan 15, 2014 10:53AM
Now the headlines say the US has "pledged" 380 Million dollars to Syria.  We will never get paid out of debt!!!!!!!!!! Damn you, CONgress!!!!!!!!!!!!
Jan 15, 2014 9:15AM
most of these are just stupid, of course pay more make double payments, if i had the money i would.  if i could make more money i would, i fell lucky to have the temp job that i do. i drive 1+ hour each way doesn't leave much time for another job.   i was unemployed for 1 1/2 years, could be again.  so how about some advice for all of the real people.  the ones living paycheck to paycheck, and every extra dime goes to paying off debt already.  cutting back on food, clothing, heat, etc..  already.  
Jan 15, 2014 9:10AM
Its really quite simple...quit buying and start paying off things.
Jan 18, 2014 10:02AM
32 years ago I quit buying pot, quit smoking cigs and quit going to bars.  I started putting 10% of my pay into a 401k and two years later I began traveling. Since then I have been out of the country 36 times to 18 countries. Debt, like pot, smoking cigs, heavy drinking and everything else, is a choice. Live on less. And enjoy life more.
Jan 15, 2014 12:17PM
All good advice, but it takes a lot of self-discipline to pay off debt.  Most folks don't have that.
Jan 15, 2014 11:47AM
Once they said stop using your credit cards and pay off the cards as much as you can afford, that was the whole article right there.  The rest they've been saying since they invented credit cards, it's a no brainer.
Jan 15, 2014 12:41PM
Don't hesitate to apply for those 0% interest cards. I don't care what anybody says about having too many cards. If you are set on paying off yor debt it's a great way to do it. Especially if your interest rates are high on other cards. We had 2 cards that were almost 30% interest. I gave in and applied for a 0% interest rate card expecting to be declined as I had been in the past, but was thrilled when I was approved. I moved one of the balances over to the new card and stashed the old one so I wouldn't use it. Then I made phone calls to my other cards that had been paid off and found one that also offered a 0% interest on transfers (didn't even have to open a new card) and transfered our other high interest card over. I will continue to circulate the balances when the offeres expire until I pay the balances in full. Yes it cost a fee, but the fee is less than the interest would have been on a month or 2 worth of payments. You just have to stay on top of the expiration (I put reminders in my phone for a month before).
Jan 15, 2014 6:34PM
There's nothing wrong with credit cards.  Just don't borrow money you don't intend to pay back at the end of the month.  I rarely use cash.  I continued to use credit cards after I bought my $84K home in 1992.  I paid it off by 2001 while I continued to charge all my gas, grocery, and anything else I bought with my credit card.  I have no credit card debt yet I use my credit card every month almost every day.  I banked the interest I saved by paying my mortgage down quick too since I carried no other debt.   By July, 2010, I had $250,000 in the bank whiile I used my credit card almost every day to buy only things I would have otherwise paid cash for.    There's nothing wrong with credit cards!  The rules are simple, don't use the credit card to live beyond means!  That's not rocket science!
Jan 18, 2014 8:46AM
It doesn't take self discipline to pay off debt it takes MONEY. With stagnant paychecks and underemployment or unemployment - money is in short supply. Most people who are in debt were fine before the crash but when your fixed expenses stay the same and your earnings plummet it is hard to stay on top of things, and next to impossible not to use your existing credit cards to survive. I personally haven't had a raise in over 5 years - not even a cost of living increase. I disagree with all these comments being taken as gospel that most people don't have self discipline- that is hogwash. Most people are working hard and just can't keep up with the ever increasing costs of rent, food, gas, utilities, healthcare and all the basics of life.
Jan 15, 2014 1:06PM
the Federal Government uses "Wimpy" logic when it comes to debt, "I'll gladly pay you Tuesday for a hamburger today".
Jan 15, 2014 2:14PM
I see MSN left out "work as much overtime as you can get". That's what I do...but not to pay off debt. I use it to stuff my savings accounts.
Jan 18, 2014 7:26PM
I tried to impress on my boys to save something every payday no matter what.  If they got paid $346.83, I told them to take the $6.83 and put it away.  It does not make a big dent in the check, yet saves SOMETHING.  You'd be surprised in a years time just how much can be put away for a rainy day fund.  They can use it or keep building--doesn't matter at that point.  It's the 'getting use to saving' that becomes a good habit. 
Jan 15, 2014 2:12PM
The author's talking points are something every 6th grader should know. Pay your bills first, then eat if there's anything left over. Simple.
Jan 18, 2014 5:57PM

Sometimes you just can't get by without the credit card, emergecy car repairs, HVAC breaks down and needs replacement.


Jan 15, 2014 3:17PM
I use credit cards to my advantage every chance I get. I have two cards open right now with 0% interest. The key is to be able to pay the monthly payment and pay the balance off before the accrued interest becomes due. I use a Lowe's card and receive a 5% discount on almost every purchase and pay the amount due when I get the bill. It takes some discipline to manage this strategy but it works for me. Whenever I can buy something with other peoples money and keep mine invested I always take advantage of the opportunity. 
Jan 15, 2014 6:42PM
Don't get too many 0% credit cards like one person is suggesting.  I have a high credit score yet I'm often told that I can't get the best rates because information in a consumer credit report:  The number of accounts marked paid as agreed.  It's really a consumer report scam that the lenders use to justify charging me higher rates even though all my bills have been paid in full on time or earlier as agreed.  All the accounts are marked paid as agreed.  They don't specifically state which report or which agency but give me the name of one of the agencies with the suggestion that I contact that agency do dispute any claims.  What am I going to dispute?  That I don't pay my bills on time?  Daah!  Just pay the bill off at the end of the month.  You don't pay interest if you don't carry a balance so the card you have is good enough.  You don't need a 0% interest credit card.
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