Getting Rid of Debt Faster

Debt unfortunately is a fact of life for a lot of people. Mortgages, lines of credit, student loans, vehicle loans, and credit cards are a part of normal everyday life. The good news is that we can get out of debt and it isn’t as hard as you might think. By making a few minor adjustments in how we pay our debts we can save ourselves time, grief, and a lot of money.

The first step is to lay out all your debt on one simple sheet of paper (or on a spreadsheet if you prefer to use the computer). Who do you owe money to, how much is the total debt, what is your interest rate, what are your minimum payments, and what are you actually paying?

The second step is to order your debts from highest interest rate debt down to lowest interest rate debt. If you have a department store card this is most likely your highest rate debt. For example The Bay and Sears credit cards have 29.9% interest rates, while a lot of your “Don’t Pay a Cent Event” loans can cost you 35% interest.

The third step is to stop using your credit cards and other debt instruments. If you have regular payments coming off your credit cards, move all the payments to one card, preferably one that gives you cash back, AirMiles, reward miles, or some other perks, and make sure you are paying for those payments on top of your minimum balance payment.

The fourth step is to reduce all of your payments on every single debt except the highest interest rate to minimum payment. Take all of your ‘extra’ payments and put them on your highest interest rate debt. Keep all your extra money going onto this debt until it is fully paid off. Then CANCEL in writing (with carbon copies going to both credit bureaus) the card or loan.

The fifth step has you moving all of your now freed up cash to the next highest interest rate debt until it is gone. Then repeat until you are debt free.

If you have access to a line of credit with a better interest rate than your credit cards or other debts you can use that to pay off your more expensive debt and then move all of your payments onto your line of credit.

Becoming debt free is not complicated. By following a simple plan with a bit of discipline you can get free in way less time than you thought possible. And being able to live without the burden of owing money is a wonderful thing.

“Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt.”
Henrik Ibsen

Tammy Johnston

Tammy started working in the Financial Services Industry in 1993. The first 9 years of her career were spent working in regional offices, for independent agents, and as Brokerage Manager for two different MGAs. Her focus was on training other agents and helping them solve problems for clients. After spending close to a decade as an employee Tammy decided to venture into the “sales world”. Determined to be more than just another insurance salesman, Tammy founded The Financial Guides. She set about working with clients in a totally different fashion. Feeling that everyone needs a sound financial education she created her first class “Financial Journeys”. The goal was to provide the accurate, unbiased, basic information in simple English that we all require, but can’t easily find. Knowing that the best way to learn is by having fun and being comfortable, Tammy takes good care of her guests with excellent food and lots of laughter. Further expanding her educational and value added offerings Tammy created “Sandwich Safaris”, “Business Builder Nights”, “Small Business Class”, and "FInancial Journeys Summer Camp". Putting time and care into helping with the necessary tasks required to run a successful financial household Tammy works with clients to set up budgets that actually work, reviews credit and debt to make sure it is working for the client and not just against, and makes sure all the pieces of the puzzle fit together properly. Knowing that all financial aspects affect one another she looks at the whole picture. Honestly tells you what is working, what could be improved, and what is missing. Tammy’s clients understand what they are doing, why they are doing it, and have hope for the future. The newest project by The Finanical Guides is our Childrens' Financial Book Series. To check out the books please go to