How to pay off a lot of debt in a hurry
If you scan news sites on a regular basis you’re certain to come across a very particular kind of article. It’s the “This couple paid off $20,000,000,000 in just 8 weeks!” article. I see them all the time. It’s almost always a couple. They have a lot of debt. And then they manage to pay it off in a hurry. That’s the whole story.
It’s a nice story, but I usually come out of it thinking, “Well, none of that applies to me.” The circumstances described are never anything close to what I’m dealing with, so I put the whole thing out of my mind until the next version of the story comes along.
If you read enough of these stories, however, you start to see a pattern. By understanding that pattern you can see what it takes to pay off large amounts of debt in a short amount of time. It isn’t easy, but if you’ve got a lot of debt and you want to make paying it off as quickly as possible your top priority, there are a few essential criteria you need to meet.
You have to have money
That probably seems obvious, but it needs to be said. You need income in order to pay down debt. Not just that, however – you need enough income that you can handle your other bills and responsibilities and still have a substantial amount left over to dedicate to debt repayment. For a lot of people in debt, that’s a hard condition to meet.
You can pay well above the monthly minimum
Paying the minimum on any debt is likely to keep you in debt for a long time. In order to reduce debt – and reduce it quickly – you need to be able to pay well over the minimum. The more you can pay, the faster you’ll be able to chop down your debt. That may require taking on a second – or even third – job. That’s a difficult commitment to make, but if you’re serious about getting out of debt as quickly as possible, you need to be willing to go all out.
You’re willing to live below your means
One reoccurring theme throughout all these stories of people tearing through their debt – they all commit to living as modestly as possible until their debt is gone. For many this means living in an apartment or house that is much cheaper than what they could afford. It means cheap cars (or public transportation). It means ignoring what you can afford in favor of only what you need.
You’re willing to defer all the perks until the debt is gone
Debt busting on this scale requires a commitment to total, widespread frugality. The cheap apartment is a good start, but to be truly successful (in a limited timeframe) you’ll also have to commit to forsaking all the perks of life. That means vacations, dining out, costly hobbies, and any other activities that cost money and aren’t completely necessary need to take a seat for a while. You need to create a tight, tight budget and you need to make it stick.
You have very clear goals and a very clear plan to reach those goals
It’s not quite good enough to simply say, “I’m going to get out of debt now.” Getting out of debt is a good goal, don’t get me wrong, but how are you going to do it? And when is it going to be done? The folks who pay off massive amounts of debt in short periods of time have a tendency to map it all out. That means knowing exactly how much you’ll pay, when you’ll pay it, and what you’ll have to do in order to create that available money.
Everyone is on board with the plan
If you’re a couple or a family looking to pay down debt quickly, you need to all be on the same page. Having a goal and a plan doesn’t work unless everyone agrees to do their part. The more people involved the more important this is, because making this kind of commitment and following through is hard.
You’re willing to use all the help you can get
Depending on your credit, you might be able to consolidate your debt into a single payment with good terms. Alternately, you could try using a debt management plan to potentially get a lot of the same benefits of a consolidation loan, just without the loan part. If you’ve got friends and family who are willing and able to help out along the way, let them. Take advantage of every available opportunity to make this process easier for yourself.
You’re willing to follow through to the end
Once you’ve got the right goal, the right plan, and total buy-in, you just need to see it through. That means everyone stays accountable and you never lose sight of your goal. You use every resource at your disposal and keep at it until your debt is gone. As stated before, it won’t be easy. But if you commit to a plan and see it through, maybe someday I’ll see an article about you and the massive debt you paid off in record time. Good luck!