My end goal for all my readers is that one day, you can say, “nah, I don’t want this stressful job anymore. I want to spend my time doing this…” And then, you can happily afford to go and do it!

On your way to financial freedom, you’ll need to pay off your debt. Here are 6 steps to get you there:

1. Set goals

2. List your debts and their balances

3. Order the list from highest interest rate to lowest

4. Tackle the high interest rate debt

5. Make it automatic

6. Use common sense

Let’s dig in:

1. Set goals

Do you want to pay off your debt in 10 years? 10 months? Make a clear and realistic goal. Debt doesn’t disappear overnight. Don’t be discouraged that it is taking you 20 years to pay off a 30-year mortgage (which is ahead of schedule, by the way!).

Get my worksheet on goal setting if you need some help.

2. List your debts and their balances

The average American has 4 credit cards. Yikes. Now, if you pay off those cards every month, swipe away. However, if you carry balances, read this blog on credit card debt before continuing on.

So, list out ALL your debts and balances. I’ve learned that some people aren’t even aware of the entire amount they owe. Looking your debt in the face is an important step.

3. Order the list from highest interest rate to lowest

If you are a Dave Ramsey fan, you might fight me here. That’s ok. Dave talks about Debt Snowballing, and he has valid points. I disagree with Dave though, as I am a fan of the Debt Avalanche method (which is what I am describing).

Order your above list by the highest interest rate. Example:

1st – American Express Card – $4,000 – 21%

2nd – Discover Card – $2,010 – 19%

3rd – Car Loan – $12,000 – 4%

4th – Mortgage – $120,000 – 3%

4. Tackle the highest interest rate debt

I had you list your debts in order by interest rate, because for the most part, I want you to tackle the high interest rate debt first. Mathematically, you will end up paying fewer dollars in the long run compared to paying off the small debts first.  Now, don’t neglect your lower interest rate debt in the meantime.

– Make your payments so you don’t incur other fees and damage your credit score.

– Consider consolidating your debt.

– Contact your lenders and ask if they’d give you a discount if you paid the debt in full. (This might sound ridiculous, but you never know unless you ask!)

5. Make it automatic

Forgetting a payment and incurring a late fee is a demoralizing blow if you are on mission to pay down debt. Either log on or call your lenders to set up automatic payments. If your personal cash flow is stretched, set the automatic payments to be the minimum payments due, and if you can log in that month and increase the payment, do so! This will help avoid overdraft fees.

6. Use common sense

These steps to paying down your debt are merely suggestions… suggestions that honestly may or may not work best for you. So, use your common sense to come to a reasonable conclusion. If you have a $100 debt at a 15% interest rate, you don’t have to wait to pay that off just because I told you to tackle your $7,000 debt at 20% first. Do what is easier, most efficient, and makes the most sense for you!


Paying off debt is one of the more rewarding financial accomplishments. To avoid debts in the future, open a savings account and plan for big purchases, so they don’t end up on a credit card or loan! Budgeting is often the key to successful debt avoidance. But personally… I hate keeping a budget.


Here is an article for budget enthusiasts: First Timer’s Guide to Budgeting

Here is an article for budget avoiders (ME): The Financial Advisor Without a Budget