True story: Amanda was $30K in debt between her credit cards, and car payments. After working with her coach, Claire, she paid off her debt in 6 months and increased her savings by +$5k.
We all have some form of debt. Being able to use credit cards is helpful, but when it gets out of control, it impacts our health and wellbeing.
People with debt are 3x more likely to suffer from mental health issues
The Power of a Money Coach
If you’re sick, you need a doctor. If you’re trying to improve your tennis game, you need a tennis coach. And if money is holding you back, or giving you sleepless nights, you need a Money Coach.
Amanda’s Money Coach, Claire, not only helped her come up with a clear plan, she also helped her understand the emotional impact of her relationship with money. Amanda was able to pay down her debt, and stay debt free.
A money coach can help you:
- Build a personalized plan that will work for you
- Identify and tackle the emotional and behavioral reasons for debt
- Help you take the right steps
- Keep you on track, and ensure you meet your goals
- Support and guide you all the way — without judgement
Take Control of Your Debt
Here are some steps that you can take today to pay down your debt faster, and start building wealth.
Step 1: Understand Yourself, and Your Debt
Debt is never just a number — what you spent that money on, and why, is just as important. Think of your bank statements as a diary of your life, and a chance to review where you spent your money and energy.
Don’t avoid the details, lean in. Start by making a note of how much you owe, the interest rates, your minimum payments, and how much you spend monthly on paying down your debt.
Step 2: Hit Pause
In order to make progress, it’s time to make some changes and stop adding to your balance. Avoid using your credit card. If it’s helpful, put it away or delete the details from your phone or computer. If you want, just shred it.
Reframe the way you think about credit cards — you just don’t need them.
Step 3: Set a Date to be Debt-Free
Debt comes with a lot of stress. Now that you know how much you owe and how much you can pay off each month, set a target date for yourself to be debt-free. It’ll require some sacrifice, but you’ll be better off in the long term.
Step 4: Pay down Your Debt
Now let’s focus on how to pay off debt. Consider the following methods:
- Snowball Method: pay down the smallest amounts owed first, while making minimum payments on others. Small wins lead to bigger ones and it’ll feel good to see some of the balance at 0.
- Avalanche Method: pay down the highest interest debt first. You’ll save money in the long term and that’ll pay off in spades — pun intended.
You can also combine elements of both to pay off your debts.
Step 5: Consolidate Your Debt
If you have a lot of debt across different cards and lenders, consider combining and consolidating.
There are a few tools available to consolidate all of your debt:
- 0% Transfer Credit Card: if you qualify you can apply for and open a new 0% Transfer Credit Card, which means you won’t pay any interest payments for a set term, freeing you up to save money. There might be fees on the transfer but this is a good way to consolidate your debt, and make just one single payment without accruing interest.
- Debt Consolidation Tools: other apps and tools, like Tally Financial and Happy Money, offer lower interest rates and will pay credit cards on your behalf. Essentially, you’re borrowing from another lender but at lower interest rates, which again saves money.
- Debt Consolidation Loans: this is similar to debt consolidation tools, but from a bank. If eligible, you’ll get a personal loan at a lower interest rate to pay down your credit card debt.
Step 6: Find More Money
Paying down debt takes effort and sacrifice. But if other people are doing it, so can you.
- Review your spending and see where you can save. Cancel unused subscriptions, review your grocery shopping, put off that luxury purchase. Use all that extra money to pay down your debt.
- Increase your earnings. Do you have items you can sell or a side-gig you can make money off? Every little bit adds up.
Step 7: Find Your Support System
Paying down debt is hard, and often requires discipline and support. So, to ensure you’re actually successful, find and build your support system.
If you feel comfortable, ask your family, your partner, or even your friends to help you through this.
Money Coach FTW
Alternatively, work with a Money Coach. Your coach will help you understand your relationship with money and how that’s holding you back. They’ll also help you stay accountable and guide you to make the necessary changes to become, and stay, debt-free.
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