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Are you ready to get out of debt? But don’t even know where to begin?

You know you need to make a debt payoff plan, but you don’t know how or where to start.

I’m passionate about paying off debt and want to help you! We worked so hard to pay off our mortgage in just under 5 years. Let me tell you, being debt free is the greatest gift you can give yourself!

Becoming debt free might feel impossible right now, but all you need is an action plan.

I’m going to teach you how to make a debt payoff plan so you can become debt free, too!

How to Make a Debt Payoff Plan in 4 Steps

Follow the steps below to make your debt payoff plan and start tackling the debt!

Debt free, here you come!!

If you need a total financial makeover, I highly recommend this super affordable book. It’s the perfect book to get your finances under control, and get out of debt. You can go back to it again and again. Check it out here.

Step 1: Figure out exactly how much debt you owe.

You need to know exactly where you are starting and how much debt you have.

If you only have a mortgage, this will be pretty easy. If you have several loans, this may take a little longer. Either way is perfectly ok!

Here’s what you need to do:

Log in to your online accounts or find your most recent statements for ALL of your loans. Look for the current balance, monthly payment, and monthly due date.

Write down all of this information or make a spreadsheet. You will want to have all of this information in one place to quickly find what you need.

Step 2: Set your goals.

Time to brainstorm and set some goals! In step 1, you figured out exactly where you are starting. In this step, you are figuring out exactly where you want to be.

Here’s what you need to do:

Brainstorm your biggest financial goals. What do you want to accomplish financially?

Now, narrow down and focus on your biggest debt free goal.

You will need to make this goal super specific.

• Have a specific measurable goal. Know the exact amount you need to pay off. This is the number you found in step 1.
• Have a timeline to reach this goal. When do you want to achieve this by?

Step 3: Break down your big goal.

Now that you have assessed your current situation and made your big financial goals, it’s time to connect the dots. How do you get from where you are to where you want to be?

ACTION

More specifically, you need an action plan. A game plan to make your goals happen.

Here’s what you need to do:

First, we need to break down those big, huge goals into baby goals that you can easily achieve. When you break down big goals into tiny goals, your crazy goals become more realistic.

To do this, take your goal and break it down into a yearly goal. Then, break it down into quarterly goals. Next, break it down into monthly goals. And finally, weekly goals.

This is my favorite way to reach my biggest goals – just break them down into tiny, super doable goals.

Step 4: Make your debt payoff plan.

Once you get your big goal broken down into baby goals, it’s time to start to make your debt payoff plan and start taking action. Complete your weekly goal and track your progress towards your big goal.

It may not seem like you are gaining much traction at first, but just keep plugging away and keep your head down. You will be getting closer to your goal each and every month.

Here’s what you need to do:

Make a debt payoff plan using the big goal that you broke down into baby goals. You can make your debt payoff plan using a simple sheet of paper, your planner, a spreadsheet, a calendar, some other kind of visual, or an app.

Make a plan to complete your weekly baby goals each week to reach your big debt free goal. You can plan a monthly check in to track your progress and make sure everything is working.

Start with the smallest loans:

I suggest starting with your smallest debt, and focus on knocking one out at a time. Pay the minimum payment on all loans, but focus on tackling and getting rid of the smaller debts first.

By paying off the smaller debts first, you will build momentum and get practice paying off debt. Once you get that first debt paid off, you will want to keep going and tackle the others.

You want to find a quick win to get started, so the small loans are the best place to start.

Use the smallest loan you found in step 1 to get started.

Now, make a plan to pay that off as quick as possible.

Once you get that debt paid off, work on the next smallest loan, until you get them all taken care of.

Related Post: 20 Tips to Pay Off Your Mortgage Early

Want to pay off your debt faster?

Now that you’ve made a debt payoff plan, I know you are super anxious to get that debt gone! Making progress each week and month towards your debt free goal will get you to your big goal, but it may take some time.

You have to keep plugging away and stay focused to keep your momentum.

There are ways to pay off your debt faster though.

Here’s my best tips to pay off debt even faster:

1. Make more money.

   Working side jobs has been the biggest factor in us reaching our goals much faster. If you can work a side job, I strongly recommend doing so to become debt free quicker.

   There are tons of side jobs you can do, many from home. When you work a side job, make sure all of the money earned goes towards paying off your debt.

   Related Post: 30 Side Job Ideas

2. Have a no spend weekend.

   A no spend weekend is exactly what it sounds like. You go a whole weekend, or week (or even longer!), and spend nothing. The money saved can go towards paying off your debt.

   Related Post: 67 Free Things To Do On A No Spend Weekend

3. Declutter and sell stuff.

   Look around your house and sell everything you don’t need. Use all the money earned to pay off debt.

   Related Post: 77 Things to Declutter and Sell to Make Money

4. Take a $1000 money saving challenge

   I created this simple $1000 money saving challenge to help you find $1000 dollars in 6 months. $1000 can really help pay off a lot of debt! Get the free printable for the challenge here.

5. Read debt free success stories and books.

   I love reading other people’s debt free stories and books about getting out of debt to get fresh ideas and gain more motivation.

   These are some great books to check out:

   The Spender’s Guide to Debt Free Living

   The Total Money Makeover

   How to Be Debt Free

6. See what you can do without.

   Take a look at your bank statements and see what charges you can do without. Could you cut cable? Get rid of the expensive cell phone? Find a more affordable place to get your hair cut? There are tons of things you can do to reduce your monthly expenses or to cut out completely.

7. Stay home more.

   If I stay home, I save money. Simple as that. Can you stay home more to avoid impulse spending?

8. Use bonuses and raises to pay off debt.

   If you get a raise at your job, you may be tempted to live a little more and spend more money on fun stuff. Resist the urge and keep your debt free goal in mind. Use all of the “extra money” to pay off debt and keep living the same way.

9. Use cash back apps when you shop.

   When you do have to make purchases, make sure to use cash back apps to save as much as you can. Use Ibotta  when you grocery shop and Ebates when you shop online. Use the cash back to help pay off debt. It won’t be big money, but every dollar helps.

   Sign up for Ibotta here and get $5 when you upload your first receipt!

   Sign up for Ebates here and get a free $10 welcome bonus.

10. Save on groceries

    Food is the easiest area in your budget to cut back on. You can do 3 things to save big on groceries and food expenses.

    1. Stop eating out – Or add a small amount to your budget and don’t go over it.
    2. Change the store your shop at – Search discount grocery stores in your area.
    3. Start meal planning – Plan what meals you are going to eat each week, so you know exactly what to buy. Buy only what you know you will eat.

So, now you know how to make a debt payoff plan and ways to pay off your debt even faster! What’s stopping you from chasing your dream of being debt free?

Now that you have made your debt payoff plan, it’s time to take action. Stop dreaming and start doing.

You can do this. And you will be so proud of yourself for chasing your dream and tackling your debt.

I’m cheering you on!!

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