Between the ages of 25 and 28, I paid off just over $80,000 of consumer debt while earning only $40,000/yr at my full-time job.
On the surface, this would seem like a nearly impossible task. After all, once taxes were deducted, nearly everything I earned at work during that time went to repaying debts with no money left to pay for living expenses.
But I utilized a number of tactics to both save money and earn more, which ultimately helped me pay off debt fast. It was part smart personal finance and part hustling, but, as a result, I was able to make huge payments and clear $80,000 of debt in just three years!
1. I refinanced some credit cards with personal loans
For anyone who finds themselves on the wrong end of credit card debt, personal loans can be a lifesaver. If your credit is at least above average (roughly, that means at least a 650 credit score), you may be able to get a personal loan of up to $35,000 at a lower APR than your credit cards.
This is great for two reasons: First, youll save money on interest. But even better, a personal loan comes with a fixed repayment period (usually three or five years). That means youre making fixed payments each and every month and know exactly when the loan will be paid off.
2. I got a second job at Starbucks
I would work my day job from eight to five, drive 45 minutes across rush-hour traffic, and work another shift six to 10 pm; oftentimes Id work another eight hour shift on the weekend.
I put all of my earnings (and tips) toward my debt. Yes, it was exhausting-but it added up to between $800 and $1,000 extra dollars a month.
3. I got paid to do surveys and such online
Every day, big companies are looking for real people to respond to questions to help with their market research. Now lets be honest: Youre Iowa pay day loans not going to get rich answering questions about which brands of soap you prefer-the actual payout from taking online surveys usually works out to minimum wage. But, if you have time to kill, you can earn a few bucks an hour with just your laptop or your phone.
4. I used shopping portals that pay you back for every purchase
I wouldnt have been able to pay off debt quickly-if ever- if I spent a lot of money. That said, when I did have to spend money, I looked for rewards programs that would pay a fraction of my purchase back.
eBates is perhaps the best known. Today I like Swagbucks, which pays you swag points for every $1 you spend. You can redeem the points for gift cards quickly and you earn a $5 bonus after you earn your first 2,500 SB points.
Upromise is another program I just learned about and am going to join myself. Upromise pays you cash back (sometimes 5% or more!) when you shop at over 800 major retailers. The program has a college savings component, but you can use the rewards for anything-including paying down debt.
5. Yes, I used cash back credit cards for all of my purchases
Although it may be surprising, I continued to carry one credit card while I was paying off debt. Although misusing credit cards is what got me into debt in the first place, by the time I was in payoff phase, I understood the error of my ways. I had been overspending money I didnt have. Although many financial experts issue an ultimatum to anyone who has overspent on their credit cards – that you MUST cut them up-I do not like relying on debit cards or cash for all of my everyday spending.
