Top 3 Ways to Crush Your Debt

Getting out of debt doesn’t have to be complicated.

It doesn’t require any super special tricks, complex consolidation practices, confusing spreadsheets, or anything else that might make you want to pull your hair out.

If you want to crush your debt, it just comes down to a few key principles that I want to go over with you over the next couple of weeks.

As I write this post, my wife and I just purchased a $23,000 nearly brand new car (it was a few years old with very low mileage – these are the normally the best deals).

We saved up quite a bit before-hand, so we only financed around half of it. Either way, we do now have a significant chunk of brand new debt to pay off (credit to her for being very disciplined with this savings goal).

So you might be thinking, what is a personal finance blogger like myself doing getting into debt?

It’s a fair question. Why should I sit here and tell you to get out of debt, when I’m getting into more myself?

Is All Debt Bad?

Some might argue that all debt is bad and that you should do whatever you can to avoid it, especially the token jerk commenter on this post.

Even some top financial gurus go as far as to tell you to absolutely never get into any kind of debt under any circumstances, not even a credit card for monthly purchases.

Maybe that can work as an extreme measure, but I have to disagree.

Yes, it’s bad to carry debt for long periods of time (3+ years) due to the interest it costs you as well as the emotional burden, but not all debt is necessarily bad. Short-term debt can increase your buying power significantly without costing you all that much money in the long-run.

It can even be used to make you money, as is the case with many successful real-estate investors.

It will also help you build your credit score so you’re not living in a rented apartment your entire life, or stuck paying cash for absolutely everything (like the guy next to us when we were buying our car who wrote a check for a $75,000 Porsche because he had no credit history.)

Sure, you could go your entire life paying cash for everything, but you’ll probably be driving beater vehicles and not really ever owning anything substantially nice.

Truthfully, to expect to never get into any kind of debt whatsoever with the lifestyles we tend to live, is ridiculous and unrealistic for the majority of people.

But I digress.

Don’t get me wrong. I’m all about spending wisely, but Academy Success is about more than being frugal. I also want you to live the lifestyle you want to be able to live, continue to increase your financial capacity, and ensure you are maintaining solid financial practices.

And learning to manage a little bit of debt along the way is all part of that.

Don’t Be Stupid

The trick with debt is just to be smart about it. When you do use it for short-term buying power, such as a vehicle purchase, perhaps appliances for your home, school loans, etc, the best thing to do is pay it off as quickly as you can without massively affecting your lifestyle.

You also never want to dip into your retirement savings, compromise another important area of your financial life (such as your home), or make a large purchase without considering the consequences heavily first.

Only use short-term debt if you have already saved a significant amount for a down payment already, and you have a solid plan to pay off the rest quickly.

In some cases this may require some lifestyle changes, which is fine. The faster you crush your debt, the more money you save, the faster you escape from the emotional burden of that debt, and the faster whatever you financed is actually yours.

Before we get into the three ways to pay down your debt as quickly as possible (which we’ll start in a couple of days), take the first step and use my Simple Debt Payoff Calculator to figure out how quickly you can pay off your own debt.

Use My Simple Debt Payoff Calculator

I built this calculator because most of the debt payoff calculators out there were either full of ads or they were too complicated for the average person to understand and do anything with. This one is super simple. Just put in your debt amount, interest rate, and how quickly you want to pay your debt.

It’ll tell you exactly what you need to pay each month to do so.

If you have multiple, just start with the smallest one, and work your way through them (this is a simple psychological trick to get you a quick win).

My best tip with this is be aggressive. There is almost always room to pay more, and there are plenty of ways to earn extra to pay debt quicker.

We’ll start with what those ways are in a couple of days, and by the end, you’ll have a solid plan to pay off your debt quickly.

Until then, it’s time for you to earn your freedom. Use my debt payoff calculator to get your debt accounts in order and figure out which one you want to pay off first.