10 Things I Did To Pay Off All My Debt In Just 1 Year (Earning Money Online Is One Of Them)

10 Things I Did To Pay Off All My Debt In Just 1 Year (Earning Money Online Is One Of Them)

earn money onlineBetter Life

Are you struggling with debt? If yes, then listing your debts, laddering them, saving, learning how to earn money online, and using other strategies can make you debt free.

Here are ten things I did to pay off my debt in just one year:

 Listing Debts by Interest Rate

When paying bills gets tough, you might be tempted to stash them away. However, the essential key to clearing your debt is identifying your position. Get all your bills and debts and make a list of the smallest to the largest ones. Then, organize the list by the debts with the most interest to the ones with the least interest. Because the debt with the most interest is incurring more cost, you want to start clearing it first. Once you have your complete list of debts with their interest rates, you will be aware of what you must tackle to be debt-free.

Ladder Your Debts


After listing your debts from the one with the highest rate of interest to the one with the lowest rate of interest, start with the one with the highest rate of interest. Pay off the most you can and once you are through, pay a similar amount to the next debt with the most interest and so on. This will save you a lot of money, and after debts begin disappearing from the list, you will achieve more momentum.

Get an Emergency Saving Fund

Since emergencies can occur, you must prepare for them. However, saving up for an emergency should not delay your plan to clear your debts. Prior to clearing your debts, create a small emergency fund of $1000 or more for unexpected costs like medical bills, car repair, or more. This can be cash you can use when something random comes up. In case there is an emergency and you use the money, top it up before resuming debt payment. However, remember to keep paying your minimum debt payments as you top up your fund to ensure you don’t face costly penalties.

According to experts at Crediful, credit cards typically have high rates of interest. Therefore, if you use your credit card to cater to an emergency, you will end up in more debt. The more the debt you get into, the more months it will take you to clear it, and the more debt you will pay due to higher interest rates. Additionally, you will ruin your credit score.

Keep in mind that an emergency fund includes money that needs to be easily and quickly accessible once there is an emergency. You need to keep it in a safe place like a savings account. The money won’t grow much, but accessing it will be easy and it will always be there if you need it.

Make Minimum Monthly Payments

You must always ensure you meet minimum monthly payments on your debt to avoid incurring late fees and higher interest rates. The ideal way to be on par with monthly card payments is to use the closing date of the card as opposed to the due date of the payment. The closing date completes your monthly bill, and any payment after this date is part of the following month’s statement. The closing date of your card is on the statement.

The report of the card’s balance at the closing date is usually sent to the credit bureau. Hence, if you clear the balance prior to that date, your balance will be zero on your statement. This will assist you in avoiding late fees and higher interest rates in addition to improving your credit score.

Make a Budget and Eradicate Any Extraneous Things

Coming up with a budget is an excellent idea of staying on top of your expenses. As much as budgeting might make you feel broke, it is a way of directing the destination of your money.

An ideal starting point is to acquire your previous month’s expenses from a credit card or bank statement. Use an Excel spreadsheet or a paper budget to organize your expenses. Also, use an app such as Mint to budget your costs. You will need to come up with categories for every expense to create a limit to that expense and indicate your income. Ensure that your income always exceeds your budget. In case it happens, consider cutting some items from the budget.

If it becomes hard to use a computer or paper to budget, you could go for the envelope method. This is a traditional money management method that some people still use to control their spending. In this method, you make payments in cash for every expense you can, using envelopes to hold the money and maintain the budget.

Downsizing Temporarily

Paying off debt does not happen forever. It is a delayed gratification that will enable you to enjoy a life free of debt. Look at the expenses of your previous month and look for things that are not essentials. It could be eating out, entertainment, monthly subscription services, and so on. Do away with these expenses temporarily and then use the savings to clear out more debt.

Increase Your Income

After organizing your debts and creating a budget, the next step is to increase your income. You can do this by looking for a higher paying job. You can also apply for more senior positions at your current company. Additionally, you can acquire a second job so that you can make more money. You can also look into how to earn money online.

Getting a promotion or another job might take a while or prove difficult. But, do you know how to earn money online by utilizing a skill you have? If you are an application programmer or a web designer, there are many clients online looking for someone with your particular set of skills. Registering on sites like Fiver and creating an appealing profile can aid you in landing clients who are willing to pay for your talent, and this will enable you to earn money online.

You don’t need to be a web designer or an app developer to earn money online. There are jobs for hundreds of skills. 20% of the US population is working in the freelance economy with people working remotely. You can be a graphic designer, project manager, writer, or personal assistant, and there are many more ways to earn money online. If you don’t have any skills, you can learn a skill of your interest online in under two weeks and earn money online.

Transferring Balances


If you are incurring high-interest rates, transfer your balances to save and clear your debt. Make sure your minimum payments are met and your balance is cleared prior to the expiry of the introductory interest rate. Otherwise, it will result in late fees and higher interest rates.

In case you have a challenge meeting your balances as well as the minimum payments, contact the Consumer Credit Counselling Service. They offer credit counseling for free together with debt management service at the cost of 3 to 5 percent per month without exceeding $50, depending on the state.

Rewarding Oneself for Small Victories

The debt payment process need not be a chore, and you can make it fun while you do it. Make a game out of it and offer yourself a reward whenever you hit a milestone like clearing one debt off your list.

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