As we look toward 2026, I know a lot of people make New Year Resolutions. Absolutely nothing wrong with looking to improve oneself!
One of the biggest goals people have nowadays is paying off debt! This can be a huge challenge in today’s economy. Some of my other posts talk about how to save money or make extra money with side hustles, but let’s talk about a few small things you can do to pay down debt.
- Make smaller, consistent payments: Make a payment every two weeks instead of monthly. By the end of the year, you’ll have made an extra payment. That can make a big difference!
- Use Extra Change. If you get a bonus at work, or sell unused items around your home, use them for an extra payment to your debt. Even $10 can make a difference and help you save money on in interest in the long run.
- Find plan and stick to it. It’s important to find a plan that works for you and stick to it. That may look like the avalanche method (where you pay off the debt with the highest interest first), the snowball method (where you pay off the smallest debt first and then take that minimum payment and add it to the next smallest debt), the Dave Ramsey method, or something entirely unique to you. It’s important to find your motivation for paying off debt and use a plan to get rid of it. My goal was to be out of debt before we had our daughter and to save up for medical bills. I’m happy to say we got out of debt four or five months before we had her and we had money set aside for medical bills so we didn’t have to go in debt for those.
- Have an emergency fund. In my humble opinion, this is not negotiable. I know experts have differing opinions on the amount you should have saved, but figure out what works for you and your family by having that discussion. An emergency fund is there to help you not go into debt further if something unexpected should pop up. And if we’re honest, there’s always something unexpected that’s going to pop up. The difference is whether or not you are prepared for it.
- Avoid adding to the debt. If you have credit card debt, avoid using the credit cards while paying them off. No point in digging a deeper hole for yourself.
Now, I understand things happen and you may need something and have no choice but to add debt. An example of this may be a car. If you’re in an accident or your car gives out and you absolutely need one (maybe public transportation isn’t an option where you live, like us), you may need to buy a new car. However, it makes more sense to buy a reliable, used car at a fraction of the cost, then to go and spend four times that amount on a brand new car that you’ll likely be making payments on for many years. It also doesn’t make sense at that time to buy your “dream car” just because you’ve always wanted it. If your main goal is to get out debt, get a safe and reliable vehicle (preferably pay for it in full if possible) and you can save for your dream car when you’re out of debt later. - Learn from others. In this day and age, there are plenty of people you can learn from online about how to pay off debt or create a budget. I love watching Caleb Hammer on YouTube and Allison Baggerly on Instagram. Everyone is different and it’s okay if they aren’t your taste or you have someone else you prefer.
These are just a few ideas on how to pay down debt. What ideas do you have? Do you use these or other ideas? Let me know in the comments!