How to Pay Down Debt in 2017

When I look back at my twenties, one of the goals I'm most proud of accomplishing is paying off my student loans. Paying off debt is kind of a classic PowerSheets goal: it takes planning, little-by-little progress, perseverance when it seems like you're not getting anywhere, and a strong connection to your "why." That last one is especially important because it's easy to lose heart when you're slogging through the often long and tedious process.

For me, in addition to reducing the amount I'd spend in interest over my lifetime, the real WHY of paying off my debt was to move one step closer to financial freedom—because when you're financially free, you have more independence, more security, and more options in almost every part of your life.

If you're facing down debt, whether student loans, credit card, a car payment, or a mortgage, what's your WHY to get rid of it forever?

Got your why? Good! I also wanted to share a few of the tips and techniques we used as we paid off student loans, car payments, and our mortgage (ongoing!)


1. Stick to a budget. Without a doubt, following a budget is the number one reason we were able to make progress on our goals. Without giving every dollar a name, we easily would have frittered away money we could have been putting toward our payments.

2. Schedule payments in advance. Sign up online for a monthly auto-debit for each of your accounts so that you’re never late with or forget a payment. Make it automatic - you won’t miss it as much as you think.

3. Feel the pinch. Every time our budget expanded, we chose to allocate the extra dollars toward debt reduction. Raise at work? Going toward debt. Bonus? Going toward debt. Sometimes in the last few years we looked at each other and were like, why do we feel poor?? But then we reminded ourselves that we were living at a lower standard of living by CHOICE. If you’re paying off debt and are not feeling the pinch in your lifestyle, you almost certainly have room to cut back and increase your payments.

4. Get a little crazy. My sister is working with "gazelle intensity" to pay off student loans from her physical therapy degree, and to help reach her goal faster, she started picking up PT shifts at a local hospital on the weekends in addition to her full-time job during the week. Does she love giving up that free time? No way! But for a season, she's willing to trade freedom now for much greater freedom in the future. Consider working extra hours, starting a side hustle, downsizing to one car, or something else "extreme" in the name of moving the needle a little faster.


5. Pay more than the minimum amount. If you’re feeling the pinch you are likely already doing this, but it’s worth stating again: pay more than the regular monthly amount. At times, we were paying more than twelve times the required monthly payment on certain debts using the debt snowball. Which leads us to...

6. Roll the snowball. The debt snowball is simple, but it is by far the most important technique we used to pay off our debt early. The basic idea is to pay the minimum amount on all of your debts except one and then throw all of your other available resources at that one. Once that debt is paid, immediately move the payment for that debt toward another and so on until all of the debts are paid. Dave Ramsey suggests starting with the debt with the smallest dollar amount and moving toward the largest dollar amount; other experts recommend starting with the debt with the highest interest rate and moving toward the lowest interest rate or considering the taxability. We used a combination of these strategies. As long as you’re working aggressively toward your goal, I don’t think you can go wrong.

7. Track your progress. I kept a Google Doc spreadsheet that listed our debts, the current amount we paid per month on each, the outstanding total of each, and the month the last full payment was scheduled. Every time a payment processed, I’d go in and update the spreadsheet. It was extremely motivating to see everything shrink over time!

I would love to hear: Is paying off debt one of your PowerSheets goals? Where are you in the process? Are you using the debt snowball?

Show Comments (12)
  1. Katie

    My husband and I are using Dave Ramsey's method of budgeting and paying off debt. We hope to be debt free by the end of next year! We are both working full-time salaried jobs and we decided that we would only live off of one income and use the second income to completely go towards paying off debt. While we could use the second paycheck to do other things or have nicer things, we no there's no point if we're living with tons of debt (all from student loans and 1 car payment). Thank you for this post! It was very encouraging and helpful. One of my PowerSheets goals is most certainly to get this debt paid off and to SAVE!

    • Jess Metcalf
      Jess Metcalf

      I'm so grateful it was helpful, Katie! Cheering you and your husband on! What a great perspective you have! Xx!

  2. Jessica

    I am paying off student loan debt and car debt. It looks like August 2018 will be the big payoff! I have picked up babysitting and petsitting to help allow me to have a bit more freedom in my budget to do some fun things like go to a broadway show, be a bridesmaid, etc. I'm excited for a season of saving next Fall.

    • Jess Metcalf
      Jess Metcalf

      Wow, Jessica! What an accomplishment! We can't wait to celebrate with you next August!

  3. Ashley

    These are REALLY great tips!! I'm going to pin this to my my Pinterest "finance" board :)

  4. Ali

    As a Financial Peace University coordinator (Dave Ramsey's program) I can honestly say a budget changed my family tree. A budget isn't a bad word it's a way to tell your money what you want it to do. We take vacations without any stress about making payments when we get home. We drive cars we love. We drink Starbucks and we don't owe any creditors ANYTHiNG!! It's true freedom. We "made it happen"!

    • Jess Metcalf
      Jess Metcalf

      I love that, Ali! What a great encouragement that although it feels quite overwhelming, budgets exist for good, not to restrict! I love the way you said it changed your family tree! :) Xx!

  5. Natalia

    Yup! This is one of my goals too!! I actually hadn't added it to my Powersheets but this article made me realize that I should! I'm going to break my overall Goal down in to smaller monthly goals so I can track my progress and celebrate the small successes each month!

    • Jess Metcalf
      Jess Metcalf

      Love that, Natalia! We definitely encourage you to add it to your PowerSheets! Seeing your progress add up each month is going to be so encouraging! Xx!

  6. Jessica

    How do u budget when all you can get (at the moment) is a minimum wage job with very few hours? I work retail and am wondering how to "budget" if your income is unpredictable and not guaranteed because the simple fact of the matter is: you don't work: you don't get paid..Just trying to understand: not trying to put a negative spin on things...

    • Jess Metcalf
      Jess Metcalf

      Great question, Jessica! I'd make a list of your expenses first and make sure your job is covering that. If it isn't, I'd recommend finding some additional work to help send that money to your debt!

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