How to Pay Off Debt the Fastest

According to a Federal Reserve survey in 2007, about 77 percent of Americans hold debt of some kind. Casually paying an extra few dollars will not get large debt paid off quickly. To reduce debt, you need a plan that involves methodically paying down balances on loans and credit cards.

Instructions

1

Make a list of all your debt accounts and the total amount owed. Include debts that have regular monthly payments and those that do not, such as past due medical bills. Put your list of debts in order from smallest to largest. Post your list in a place you will see every day.

2

Write down all the ways that you are willing to commit to paying off debt. An extra part-time job, cutting out luxuries, such as eating out, and selling unneeded items can help. Post your list next to your debts to stay inspired.

3

Pay off the smallest debt first. The smallest debt is the easiest one to pay off and you will get a sense of accomplishment. Cross the debt off your list once it is paid and mark the payoff date next to it. Think of your accomplishment each time you look at the list to stay motivated.

4

Tackle the next debt on your list, again putting every extra dollar you can toward paying it off in full. When it is paid off, continue to the next bill on your list. As you pay off each debt, you will have one less monthly payment to make -- and you will have more money freed up to pay down the bigger debts.