This article originally appeared on Debt.com
If you’re carrying a large amount of debt and wondering how you’ll ever pay it off, you’re far from alone. The average credit card debt per household is $6,270, according to the latest data from ValuePenguin.
I had around $8,000 in credit card debt once, a challenge that seemed insurmountable. However, I paid it off within 18 months by staring down the debt monster, sizing up what I was facing, and gaining small milestone victories along the way to a zero balance.
No matter what you owe, if you want to pay off debt, you have to start somewhere. Here’s how I paid off my $8,000 debt in 18 months – and how you can use the same methods to boot your own debt monster out the door for good…
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1. Tally up your debt
My credit card balance crept up because using the card was painless. I didn’t have to think about how much I was actually spending during my purchases. To pay it all off, I had to first figure out exactly how much I owed. Then I had enough information to formulate a debt payoff plan.
2. Pay smaller amounts first
I tackled the smallest debts first so I could enjoy more immediate milestone victories. I still made small payments on larger balances but pounded away at the smallest ($1,200) balance first.
Once that was paid, I started on the next $2,300 balance and eventually wiped out the $4,500 balance. Paying the smaller debts first removed the “impossible to pay off” element that big debt had always held.
3. Create a budget and stick to it
Without a budget, you’re constantly wondering where all your money went and why you’re always broke. Putting together a budget is easy. Here are a few free budget apps or online versions you can try, Mint or Tiller.
4. Temporarily stop using credit cards
I know it’s painful but you have to stop using credit cards, even when paying for gas, utilities, and gym memberships. Use your debit card for those expenses instead.
5. Pay with cash
How many times have you used your debit card around town for a few days and then realized that you’d blown through hundreds of dollars?
That won’t happen when you pay with actual currency because you’re more likely to pay attention to your spending. Withdraw a weekly cash allowance and use your debit card for gas, utilities, and other online expenses.
6. Increase your income
I paid off my debt faster because in addition to my full-time job, I dog sat for my neighbor who traveled frequently. Get a part-time job or start a side hustle and apply that income to your debt.
7. Reduce expenses
The reason I had so much credit card debt was that I was spending more than I could afford. So I got rid of cable TV and replaced it with Netflix, saving $100 a month. I got a cheaper phone plan, turned off lights I wasn’t using, didn’t waste gas, rented movies at Redbox, and shopped at a discount grocer.
I also hung out at the library. Cutting expenses helped me pay off debt faster and made my monthly expenses manageable so I didn’t charge up my credit card again after I paid it off.
8. Build an emergency savings fund
Once you’ve eliminated your credit card debt, take those same payment amounts and begin stashing it in a savings account. Save at least $1,000 for emergencies that you’d otherwise have to charge on a credit card. Then keep adding to the balance.
9. Change your spending habits
Unless you change your everyday spending habits, you’ll find yourself back in debt a year after you paid it all off.
I’ve had debt creep up again because I allowed my emergency savings to dwindle, put a recurring monthly payment on my credit card or abandoned my monthly budget. I’ve found that paying with cash is the best way for me to not overspend.
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10. Adjust your attitude about debt
If you want to get rid of debt and remain free of all the stress, shame, and worry that comes with owing a ton of money to creditors, you’ll have to change the way you live, spend and think.