Paying down debt can often seem daunting, insurmountable, and sometimes entirely defeating.
Yet the need for Americans to get control of their debt is more pressing than ever. As of February 2019, according to the Federal Reserve, consumer debt exceeded $4 trillion for the first time ever — that’s not even including home mortgages.
While there are many tried-and-true approaches to paying down debt, including the debt snowball method and using a loan to consolidate high-interest debts into one (ideally) lower monthly payment, we asked personal finance and debt experts to share some of the other, smaller, daily or weekly ways to effortlessly chip away at those bills. It turns out there are a variety of tactics you can apply to your payment routine to help speed up your journey toward being debt-free.
1. Use apps that help pay down debt.
There are apps for nearly everything these days. Apps that help you save money, apps that help you invest and yes, apps that were created specifically to help you with the chore of paying down debt.
Cents makes monthly payments toward your debt by using what it calls the roundups from your purchases. In other words, spend $9.45 on something, and Cents will round up the purchase to $10 and put the remaining 55 cents toward debt payments.
The app claims it can help erase compounding interest on your debts, saving the average user hundreds of dollars.
Farrington did a test run with the app himself, and liked what he saw.
“When I looked into this app, a quick review of my transactions for the previous month showed that the Cents app would have directed $42 to debt, and charged another $2 for its services,” he explained. “That isn’t a ton of money per month heading to my debt, but the cost also isn’t too high. I believe someone struggling to pay down debt or who is simply looking for more painless ways to pay down debt might find the extra $2 well worth the cost.”
Cents is of course, just one example. Other options include ChangEd, which operates in a similar way as Cents, rounding up your spending to the nearest dollar. But in the case of ChangeEd, the money is applied to student loan debt.
Tally, meanwhile, is yet another helpful app, one aimed at those with particularly high-interest credit card debt.
2. Set up direct debits to a savings account.
Yaz Purnell, founder of The Wallet Moth, a lifestyle and money website that provides practical, sustainable, and frugal living advice, offers yet another option to help banish debt.
“One of my favorite ways to pay extra towards debts without even thinking about it is to simply set up a direct debit into a savings account that’s dedicated to paying off a loan,” explains Purnell. “Hide, or even destroy, the debit card associated with that savings account so you can only access the money via your online banking.”
Once the account is established, set-up a direct debit to transfer a small amount of money to your new savings on the same day you get paid.
“Soon enough, you won’t even miss that spare cash – and you’ll have a nice pot of money accumulating for paying off your loans in no time,” says Purnell.
3. Split your debt payments in two each month.
A biweekly approach to debt payment can go a long way toward more quickly eliminating those bills, says Adele Alligood, a financial advisor with EndThrive. It was one of many measures she used to help pay off $76,000 in debt.
“By using this biweekly payment method, it means you’ll have an extra payment go towards your loans each year with no extra effort,” she explains.
Here’s what Alligood means: Whether it’s a credit card, mortgage, or student loan payment, divide the monthly payment in half, and then pay that bill every other week instead of just once a month.
“For example, if you’re paying $400 per month, split it into $200 every two weeks,” said Alligood. “This method is great because it requires no extra work – you just change the way you make the payments.”
The biweekly approach to paying debts means you’ll make 26 half payments in a year– or 13 full payments, as opposed to the standard 12 full payments made on a monthly payment plan, continued Alligood.
In other words, you will have made an extra payment towards your debt each year, without even feeling the financial impact.
Yet another variation on the increased payments theme, Lisa Hebert, creator of Money Minded Mom, suggests making payments every single week.
“There are two advantages to making weekly payments, says Hebert. “One, you’ll end up making 52 weekly payments, which equates to an extra payment per year. Secondly, you’re accruing less interest throughout each month on the outstanding balance of the loan. This reduces the total amount of interest you’ll pay during the life of your loan, saving you money in the long run.”
4. Increase debt payments when you get a raise.
Sure, it might be tempting to pocket your annual raises and live a little larger. But if you immediately put the extra income towards your loans or debts, you won’t even notice the missing money, says Anna Keisler, an associate financial advisor with SG Financial.
However, Keisler offers one caveat to this suggestion. If you have no emergency savings, it’s a good idea to split that raise in half.
“Put half of it into savings while putting half towards debt,” she explains. “When you have enough saved up, consider increasing the amount you put towards debt.”
5. Transfer your debt to a lower interest rate.
This tried and true method of helping to attack debt should be well known by now, but it’s worth repeating.
“If you have outstanding credit card debt, transfer it to a line of credit so you’re paying a lower interest rate and putting extra money towards your overall debt,” advises Jacqueline Gilchrist, creator of Mom Money Map. “The interest rate for credit cards is often over 20%, whereas the interest rate for a line of credit is usually around 5%.”
Yet another variation on this theme is shifting your credit card balances to a zero-interest balance transfer card, so every bit of your payment is being applied to the principal.
6. Use gift cards as budgeting tools.
When we overspend in our daily lives, it impacts how much money we have available to pay towards debt each month, says Ryan Junas, a personal finance coach and creator of the blog Arrest Your Debt.
“Often groceries and entertainment are the areas we overspend on the most,” Junas explained. “If you plan out your entertainment and grocery bill at the beginning of the month, you can purchase gift cards for those amounts. When you go to the store, bring only your gift cards and leave your credit cards at home. When the money runs out, you cannot overspend. This leaves more room for debt repayment at the end of the month.”
What’s more, you can often buy gift cards on the resale market at a discount, freeing up more cash for debt repayment. Junas suggests looking for discounted gift cards at places like Costco, Sam’s Club, or Raise.com.
Mia Taylor is an award-winning journalist with more than two decades of experience. She has worked for some of the nation’s best-known news organizations, including the Atlanta Journal-Constitution and the San Diego Union-Tribune.
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