Rachel Cruze: 7 Secrets To Paying Off Your Debt Faster

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Some people never get out of debt no matter how much they try. Because as soon as they’re clearing one debt, they’re entering into another or even multiple. This may be due to poor spending habits — or high interest payments that make paying down the principal near impossible.

Finance mogul Rachel Cruze has seven tips to help you pay off your debts as soon as possible. These tips will help set you on the path to a debt-free life, relieving financial stress and allowing you to invest more in your future.

Surround Yourself With Positive People

It’s a popular belief that you are what you think — and by extension, what other people think and say can impact your lifestyle. What kind of people are around you? What kind of things do they say?

If you are surrounded by people who think it’s impossible to get out of debt or who live by acquiring debts as solutions to problems, it’ll be difficult for you to get out of debt no matter how hard you try. This secret is relational as it requires you to get your mindset right which will in turn affect your behavior toward your debt repayment. To do this, Cruze stresses it’s important to “draw boundaries with your family and friends who bring additional voices you don’t need to hear.”

Pause Investing While You Pay Off Debt

While this is a tactical approach, it may feel backward to some people and like they’re taking a step back with their finances, according to Cruze. In reality, you’re going forward at a slow pace. Investing instead of focusing on your debt can fool you into believing you’re being financially savvy, even if you’re drowning in debt. The fact is, even if you make more from your investments than you’re charged in interest on your debt, investment returns tend to vary and high-interest debt will keep chipping away at your wealth and income until it’s paid off. Channeling more of your income — including investment funds — to your debts will enable you to get out of debt faster.

If your debt is low interest, however, you may be able to keep investing wisely because you’ll be greatly outpacing that interest with your investment returns.

Sell Stuff You Don’t Need or Use

As simple as this is, it’s not always obvious to many people. Look around your house — is there stuff that’s valuable but you may have outgrown? Items sitting unused that have become clutter in your space? You can sell these things off to earn money which can be put into your debt repayment. Although it’s easy to be sentimental about our possessions, most of us could do with a good decluttering.

Get a Side Hustle 

There are so many side hustles you can do both offline and online. You might be working hard at the job you already have, but it wouldn’t hurt to pick up some extra income where you can. Side gigs with easier entry include things like food delivery or serving tables on weekends. If you have a craft, you can offer it as a service in the form of lessons, or use your craft to create and sell products. The income might look little at first but if done over a period of weeks and months, it’ll add up to a reasonable amount that can go into offsetting your debts quicker.

Skip Vacation

As tempting and relaxing as a vacation is, you might have to pass if you’re looking to pay off your debt faster. The thousands of dollars you’ve saved up for your personal or family trip can impact your debt repayment significantly. There’s nothing wrong in delaying your gratification until later when it’s more convenient for you, especially with the stress relief that debt repayment will bring.

Do a One-Month No Spend

Habits start off as continuous activity, and this is the same with spending or not spending. Cruze advises to do a no-spend challenge for one month where you do not buy anything that’s nonessential. This way you’ll be saving money that you can channel to your debt — while still purchasing necessary things like groceries and gas. Remember to be honest about the difference between your “needs” and “wants.” Over time, this habit will build positive financial habits, like restraint in tight times, even after you have paid off your debt.

Make a Budget

Budgets are essential. Whether or not you like them, they hold you accountable. Tracking your expenses and income can help you clearly project where you are in your repayment journey. Without a budget to keep you accountable, it will be difficult to get out of debt and likely take you longer than if you kept track of your expenses.

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