Are you feeling like a solo passenger on the Hot Mess Express when it comes to debt management? 😰 Trust me, you're not riding that train alone. I’ve been there, and so have many, many others. We don’t ever talk about it, though, so it can feel lonely! If you’re ready to take the first step toward getting your financial sh*t together, I’m here to help guide you!

How to Start Getting Out of Debt

Step 1: Organize all your debt

First things first: We have to face it head-on. Grab your laptop—or a pen and paper; this doesn’t have to be fancy—and make a list of all your debts, including the interest rate, minimum payment, and due date. This will help you stay organized by knowing what’s due and when so you don’t miss any payments.

Step 2: Autopay is our BFF

Life is busy enough without having to remember every single bill’s due date. Set up autopay for the minimum payment on all your debts (and other bills while you’re at it). And if the due dates don't work with your pay schedule, call the company and ask to change the due date. Yes - you can do that!! You're the CFO of your money here, so let’s take control. We don’t want to forget and end up with any late penalties or, worse, in default (this has a significant impact on your credit score).

Step 3: Choose a debt payoff method

Now it's time to get down to business. You can do one of three methods: avalanche, combo, or snowball.

Snowball Method

Pay the minimum on all debts and put extra money towards the debt with the lowest balance until it’s completely paid off, working your way up to the debts with the highest balance.

Avalanche Method

Pay the minimum on all debts and put extra money towards the debt with the highest interest rate until it’s completely paid off, working your way down to the debt with the lowest interest rate.

Combo Method

Pay the minimum on all debts but flip-flop between the snowball and avalanche method.

Example: Maybe you have three credit cards:

Credit Card 1 has a $500 balance with a 31% APR

Credit Card 2 has a $4,000 balance with a 34% APR

Credit Card 3 has a $2,000 balance with a 24% APR

With the Snowball Method, you’d pay off Credit Card 1, then Credit Card 3, then Credit Card 2…because that’s the order with the smallest balances

With the Avalanche Method, you’d pay off Credit Card 2, then Credit Card 1, then Credit Card 3…because that’s the order with the highest APR.

With the Combo Method, maybe you decide to use Credit Card 1 since it has a low balance and you want a quick win, but then maybe you use Credit Card 2 next since it has a much higher interest rate than Credit Card 3. You flip-flop between the two methods.

What you DON’T want to do is just blindly throw money at debts randomly because you get zero quick wins, and it can feel really defeating never to have one fully paid off. Know yourself best and pick that method. Mathematically speaking, the Avalanche Method is best because it saves you the most money over time. But we are not robots; we are humans. So, if you know that you’d be most incentivized by knocking things off your list quicker, maybe you go with the snowball method.

It's like a game of Jenga, but instead of stacking blocks, you're crushing debt.

Benefits of Paying Off Debt Sooner

I cannot stress enough the benefits of paying off your high-interest debt as soon as you can. Notice I said HIGH INTEREST. I personally don’t believe all debt is bad. If you’re financing your car at a 2% interest rate - you get that, my friend! But if you’re rocking 30% interest rates on your credit cards, that’s another story.

Knocking out this debt will save you tons of money on interest payments. Plus, paying off your debt will improve your credit score (which is huge for buying a home or car, getting approved for large purchases, or even renting your dream apartment).

But most importantly, paying off your debt sooner will reduce your stress levels. Think about it: no more late-night stress sessions worrying about how you're going to make those minimum payments. And like I always say, money is mental AF.

Other Helpful Tips for Getting out of Debt

Here are some other tips that may be helpful to you as you start to pay off your debt.

🪄You may consider calling your credit card company and seeing if they can lower the interest rate. If you have a good payment history, chances are they would be willing to (at least for a short period of time).

🪄Call your credit card company to see if they have any special promotions they can offer you. The worst thing they’ll say is no 🤷🏼‍♀️

🪄Building in a “fun” piece to your budget as well as having an emergency fund should be non-negotiables. You don’t have to cut out everything! If your morning Starbucks is the best part of your day, keep it in your budget! Will it delay your debt-free date slightly? Probably. But it’s better to create something sustainable that you will actually stick to than fall off the wagon a couple of months into your journey.

Final Thoughts

Taking the first step is the most challenging but most crucial part. I know it’s hard, but you HAVE to face it head-on. It doesn’t go away just because we aren’t looking at it.

Managing debt can feel overwhelming, but remember that consistency is key. Follow the plan and stick to your commitment, but remember to also be patient with yourself. You will fall off the wagon, and your first plan won’t be perfect. But get back on that wagon, friend. A lot of other people have debt, too. Learn from your mistakes, build out a sustainable plan, and tackle the problem head-on.

You can do it! Being debt-free is going to be an amazing feeling! I still remember how I felt the day I made my last student loan payment. Sitting in my apartment alone, I suddenly looked around for someone to high-five. WHY IS CONFETTI NOT EXPLODING OUT OF MY COMPUTER? 🙂! If you pay off your debt, let me know, and I would love to give you a virtual high five!

Looking for even more money management tips to crush debt and build wealth? Join the Wolfe Pack and get my newsletter to be delivered right to your inbox each week!

How to Get Out of Debt