One of the most important aspects of your personal finances is controlling your debt. If you’re currently feeling as if you’re sinking in debt, you’ll want to do something about that sooner rather than later. But it’s not all about getting out of debt quickly; what’s most important is that you pay down your debt sustainably, starting now. Getting out of debt overnight isn’t going to happen, so let’s talk real strategies around getting aggressive with your debt.

Start by Getting a Clear Overview

The first thing you need to do is get a clearer view of your debt situation. You can’t take the necessary steps to improve your debt situation unless you have a full and clear understanding of what your situation is. Take a weekend to assess all your accounts, your debts, your expenditures and everything else. It’’ll provide you with the starting point you need. List out what the debt is for, to whom you owe it, how much you owe and at what interest rate it’s at. Laying it all on the table will help you getting full visibility into where you’re at, how long you’ll be there without making changes, and what it’ll take to get out of debt.

Prioritize Debt Over Savings

Next, it’s a matter of getting your priorities straight in terms of how you use your income. You might be tempted to save money for the long-term, but it doesn’t make as much sense to focus on that while you’re still struggling with debts. So instead, prioritize your debts and repaying it sooner rather than later. The one exception I’d make here is ensuring that you have an emergency fund setup, and then I’d recommend prioritizing paying down debt. The reason? Interest rates. I’m a big believer in ensuring that your money is working as hard as it possibly can for you, and if you’re being charged 5, 10, 15%+ on your debt and only earning 0.01-0.5% on your savings account, it’s a no brainer! Putting money in the stock market is risky, sure you might earn more than the interest rate on your debt, but maybe not!

Try to Cut Unnecessary Spending

If you’re currently spending too much money on regular outgoings, bills, expenses, subscriptions or whatever else, it’s up to you to take the necessary steps to cut that spending. When you do so, you’ll have more money left over to spend on repaying more than the minimum on your credit card debts each month. It’s something most of us can do if we put our minds to it. It doesn’t have to be a complete 180 on spending to paying down debt, focus on making incremental changes! Forgo takeout one weekend, delay the purchase of that new item online you’ve been watching, or pause some subscriptions for a month or two. Get creative and put that saving to paying down debt!

Understand the Differences Between Your Different Debts

There are different kinds of debts you might need to overcome, and it’s really important to keep than in mind when tackling debt. For long-term debts from places like hard money lenders, you might not need to make it a priority of yours to pay off the debt fast. That’s often because debt like home loans often come with lower interest rates, and (although it’s not a reason to stay in debt), mortgage interest can be deducted off your taxes (in many instances, up to a threshold). Focus on higher interest rate debts first would be my opinion!

For Credit Card Debt, Switch to a Card with 0% Balance Transfer

If you have credit card debt that’s causing you concern right now, you should think about transferring your debt to a credit card that has a 0% balance transfer option. That way, you’ll no longer be paying interest on your credit card debt, meaning that you’re essentially lowering your debt levels. Yes, you read that right, there are 0%, or low interest rate credit cards out there that allow you to transfer your balance. Ditch that high interest rate credit card and move the debt to a low (or 0%!) interest rate credit card. It’s definitely an option worth exploring as it can quickly save you money! Instead of lowering your payment, keep paying the same amount that you were previously and put that extra cash to work paying down your debt!

Summary

As you can see, there are plenty of helpful things to know about cleaning your debt in a way that’s realistic and sustainable. It’s understandable that you want to get rid of your debt as soon as you possibly can, but what’s most important is that you do this is a sustainable way. It doesn’t have to be about getting it done as fast as you possibly can.

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