Paying Off Debt

  • How to Stay Motivated to Pay Off Debt

    When my husband and I got married, we had six figures of student loan debt. And unfortunately, we definitely aren’t alone.

    The average student loan balance is nearly $38,000. And a significant number of borrowers are in the same position my husband and I were, where our student loan debt was considerably higher than the average.

    When you throw in credit cards, car loans, and other debts, most people are paying off debt for the majority of their adult lives.

    I know as well as anyone how easy it is to lose motivation when you’re paying off debt. There have been plenty of times in my adult life when I simply made the minimum payments because anything more felt too overwhelming. I knew I would have to increase my payments to get the debt paid off more quickly, but I couldn’t bring myself to do it.

    I’ve worked hard over the past couple of years to find strategies to keep my head in the game. These strategies helped me start paying more than the minimum payment to pay off my debt more quickly without sacrificing my lifestyle.

    In this article, you’ll learn 8 tips to help you stay motivated while paying off your debt.


    How to Stay Motivated to Pay Off Debt

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Have a debt payoff plan in place

    One of the most common problems people run into when paying off debt is that they simply make their minimum payments every month. Either that or they pay a little extra on each debt but still barely make progress on any of them.

    They don’t look at their balances altogether, and they don’t set a strategic debt payoff plan.

    The most important first step to tackling your debt is crafting a debt payoff plan. The two most popular are:

    • Debt snowball method: Prioritize the smallest debt, putting all extra money there while making the minimum payment on your other debts.
    • Debt avalanche method: Prioritize the debt with the highest interest rate, putting all extra money there while making the minimum payment on your other debts.

    I prefer the debt avalanche method because you end up saving the most money in the long run. But the debt snowball method often results in small and quick wins, which helps keep people motivated. At the end of the day, the best debt payoff plan is the one you’ll stick it.

    Once you have a debt payoff plan in place, you’ll start seeing progress on your payoff and start to see the end in sight. is hands-down my favorite tool to create a debt payoff plan. Just enter your debts, and the tool will help you prioritize and tell you how long it will take you to pay them off. The best part is that it’s a free tool.


    Create helpful habits

    Motivation is great to help you jumpstart your debt payoff plan, but unfortunately, it’s not always enough to stick with it. That’s where habits come in.

    Your habits will keep you moving on your debt payoff plan when you aren’t feeling motivated. Helpful habits to help you pay off debt include tracking your spending, using a budgeting app, and scheduling weekly or monthly money dates with yourself and/or your partner.

    The book Atomic Habits by James Clear is the best book to learn about habits and how to create healthy, helpful habits.

    The benefit of creating helpful habits to help you pay off your debt is that it no longer feels like you’re working so hard. Some of the actions required to tackle your debt become automatic, meaning you’re putting in less effort without getting less of a result.


    Break it down into small, manageable steps

    When you’re paying off a lot of debt, it can feel overwhelming to look at the big number all the time. Instead, it can be helpful to break it down into small, manageable steps.

    I like to focus on one debt at a time using the debt avalanche method. I make the minimum monthly payment on every debt except the one with the highest interest rate. That highest-interest debt gets all of my attention.

    All of my extra money goes toward that one debt, and I regularly calculate how many months until I can expect to pay it off.

    Breaking it down into small pieces helps to keep me motivated, because the end for that one debt is in sight, even if my final debt-free date isn’t.


    Create a visual progress tracker

    Visually tracking your debt payoff can be a great way to keep you motivated during your debt payoff journey. You’ll be able to see your progress first-hand and feel excited each time you get a bit closer.

    There are many printable debt trackers available for free online. When we started paying off debt, we just used the whiteboard in our living room to create a visual representation of our debt.

    There are also online services you can use to track your progress, such as, which I’ve already mentioned.


    Make it automatic

    No matter how motivated you are when you start, there will absolutely be months when you don’t feel like making those extra debt payments. You’ll find other things you’d rather spend that money on, and it’s super easy to talk yourself out of prioritizing your debt.

    To plan ahead for those months, I recommend setting up automatic debt payments. Instead of creating an automatic payment for the minimum payment amount, set it up for the amount you actually want to put toward your debt to pay it off faster.

    Read More: 6 Easy Ways to Automate Your Finances


    Find your community

    Paying off a huge amount of debt can feel incredibly lonely and isolating. But the reality is that there are millions of people going through exactly what you are.

    One of the best ways to stay motivated while paying off your debt is to find a community of people to share your journey with.

    Whether it’s a Facebook group or debt payoff accounts on Instagram, having people to share your journey with, vent to, and celebrate wins with will be a game-changer.


    Remember your why

    Putting extra money toward debt each month can be discouraging. Each month, I can think of things I’d rather spend that extra money on, and it makes me want to press pause on my debt-free journey.

    But then I remember why I want to be debt-free. And I picture what our life will look like when that debt is gone.

    If you’re feeling discouraged, think about what comes next. How will you feel when you aren’t in debt to companies? What goals will you save for when you don’t have money going toward debt each month?

    In those moments when you lose your motivation, remembering your why is the perfect thing to help you find it again.


    Celebrate small wins

    Just because you’re prioritizing debt payoff doesn’t mean you can’t enjoy your life. Celebrating small wins will help keep you excited while paying off your debt and will prevent you from burning out.

    Decide on a specific milestone — it could be $1,000, $5,000, or any number that makes sense for your debt payoff plan. Decide ahead of time how you’ll celebrate when you hit that milestone.

    It doesn’t have to be expensive, but please make sure it’s not something you do on a regular basis. It should be exciting and out of the ordinary and something you only treat yourself to when you hit that milestone.


    Final Thoughts

    Paying off debt can be long and frustrating, and it’s easy to lose progress on your way. There are plenty of steps you can take to help boost your motivation and remember why you started in the first place.

  • Using Debt Consolidation to Pay Off Credit Card Debt

    The average American family has more than $5,200 in credit card debt, according to the Experian 2021 Consumer Credit Review. And as a nation, we hold nearly $900 billion in credit card debt.

    This type of debt can be especially discouraging. The interest rates are notoriously high, meaning we end up paying back far more than we spent.

    Credit card debt can also often be a reminder of decisions that we aren’t particularly proud of, such as poor financial decisions in our younger years.

    While there’s no easy way to get out of credit card debt, a debt consolidation loan provides a way to pay your debt off a bit more quickly and save money in the process.


    Using Debt Consolidation to Pay Off Credit Card Debt


    What is debt consolidation?

    Debt consolidation is the process of taking out one loan to cover the balance of other debts. A debt consolidation loan is typically an unsecured personal loan — in other words, there’s no collateral attached to it. In the case of debt consolidation to pay off credit card debt, you’re taking out one personal loan and using it to pay off all your credit card balances.


    What is the purpose of debt consolidation?

    Debt consolidation is often used for the purpose of credit card debt.

    Credit cards have notoriously high interest rates, especially for younger borrowers. And the fact that many people have more than one credit card can mean they’re also making multiple monthly payments.

    If you have a lot of debt, you might be making sizable monthly payments on multiple cards, all at painfully high interest rates.

    Not to mention that having multiple monthly payments also means that you’re more likely to forget a monthly payment here and there, which can have major negative implications for your credit score.

    When you consolidate those credit cards into a single debt consolidation loan, you have one monthly payment and one (hopefully) lower interest rate.


    How does debt consolidation affect your credit?

    Anytime you borrow money, you can expect to see an impact on your credit score. In the case of a credit card debt consolidation loan, you’ll likely see both a positive and negative impact.

    First, you’ll probably see your credit score take a bit of a hit because of the hard inquiry on your credit report and the new debt account.

    But in the long run, it might actually help your credit score. When you consolidate your credit card debt into a single personal loan, you bring your credit card balances down to (hopefully) zero. As a result, your credit utilization goes way down.

    Additionally, as you make on-time payments on your loan, your positive payment history will help to slowly boost your credit score.


    Pros and cons of debt consolidation

    Debt consolidation comes with its fair share of pros and cons that you should be aware of before taking the leap.



    • You’ll save money. Ideally, a credit card consolidation loan would have a lower interest rate than your credit cards. As a result, more of your money each month is going toward interest. You’ll save a lot of money in the long-run.
    • You’ll have fewer monthly payments. If you have multiple credit cards with debt, you likely have multiple monthly payments. A debt consolidation loan can help get you down to just one monthly payment.
    • You’ll boost your credit score. As I mentioned above, a debt consolidation loan can help to boost your credit score over the long run.



    • You may still end up with a high interest rate. Because personal loans are unsecured, they still come with higher interest rates than other loans. And for someone with a low credit score, your rate might be just as high — if not higher — than the rate on a credit card.
    • You could pay fees. Many lenders charge origination fees on personal loans, meaning you’ll end up paying a bit more money.
    • It’s not the most cost-effective option. Depending on your credit score and the amount of debt you have, there might be a better way to pay off your credit card debt, which I’ll talk about in the next section.


    Debt consolidation alternatives

    A debt consolidation loan can be an effective way to pay off credit card debt faster, but it’s not my favorite option. Depending on your credit score and the amount of debt you have, you might instead consider a few other options.


    A balance transfer is when you open a new credit card and transfer your existing credit card balance to the new card. Many credit card companies offer 0% interest from anywhere from 6 to 18 months for a balance transfer.

    With the 0% interest, you have the chance to pay down your credit card debt much more quickly, with none of your money going toward interest.

    To learn more, visit my guide on paying off credit card debt with a balance transfer.



    Another alternative to debt consolidation is to use a secured loan. The benefit of this is that secured loans generally have lower interest rates, meaning you’ll save even more money.

    Secured loans available for debt consolidation are usually those that use your home as collateral. Options include home equity loans, home equity lines of credit (HELOCs), and cash-out refinances.

    Of course, these options have a clear disadvantage: you’re using your home as collateral. If you fail to make your monthly payments, you could lose your home. I would think carefully before using your home equity to pay off debt, and only do it if you feel confident you’ll be able to make the monthly payments.



    You’re probably familiar with debt payoff methods like the debt snowball and debt avalanche. While the two have some differences, each is designed to help you prioritize and pay off multiple debts.

    Using the debt snowball, you prioritize your smallest debt. Using the debt avalanche, you prioritize the debt with the highest interest rate.

    Using one of these strategies may result in you paying a bit more in interest since you aren’t trading in your high credit card interest rates for a lower loan interest rate. However, they can still help you tackle your debt. And you may be motivated to pay it off more quickly.


    When is debt consolidation a good idea?

    Depending on your situation, a debt consolidation loan might be the right option to help you pay off your credit card debt. Here are a few situations where it’s probably a good idea:

    • You have too much debt for a balance transfer
    • Your credit score doesn’t make you eligible for a good balance transfer offer
    • You know you wouldn’t be able to pay off your debt during the 0% interest promotional period on a balance transfer card
    • It’s going to take you a long time to pay off the debt


    Final Thoughts

    As with any financial decision, it’s important to consider your unique circumstances when deciding if a debt consolidation loan is for you. For some people, it’s the perfect solution. But other people might be better served with an alternative.

  • Should You Save For Retirement While Paying Off Debt?

    When my husband and I got married, we had more than six figures of debt between the two of us. We both had student loans and a bit of credit card debt, and I still had a loan on my car.

    One of the very first things I did after our wedding day was sit down and make a list of all of our debts. I wanted to put together a debt payoff plan ASAP.

    One of the questions I struggled with was how much, if any, we should continue to put toward retirement while paying off debt.

    Working for the state government, I was required to put at least 6.5% of my income toward my retirement account, and the state would match it. But we also had my husband’s retirement account to consider. Not to mention, once I left my job to run my business full-time just four months after the wedding, I was on my own for retirement savings.

    I’m not the only one to have struggled with this decision — it’s one of the most common questions I see from those trying to figure out their finances. And considering some personal finance experts still teach that you shouldn’t put a dollar until retirement until you’re debt-free (please don’t listen to that advice, by the way), it’s understandably confusing.

    In this article, I’m going to lay out a few basic guidelines for you to follow when figuring out how to save for retirement while paying off debt. But ultimately, everyone’s situation looks different, and you have to do what’s right for you.


    Should You Save For Retirement While Paying Off Debt?

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Contribute enough to get your employer match

    Many employers offer to match up to a particular percentage of your income that you contribute to a company 401(k) plan. For example, your employer might say they’ll match the first 3% or 6% of your salary that you contribute.

    This match is free money and could equate to hundreds — or more likely thousands — of dollars per year.

    Not only is your employer match essentially a 100% return on your investment, but it’s also a part of your total compensation. Turning this match down is essentially asking your employer to reduce your annual pay.

    If your employer offers a 401(k) match, make this your first priority. Depending on the type and interest rate of your debt, contribute just enough to get the employer match. You can always increase it later when your debt situation is different.

    Pay off high-interest debt

    The interest rate on credit cards is brutal. According to the Federal Reserve, the average credit card interest rate in late 2023 was 21.47%. And it’s likely to be even higher if you’re still working to build your credit. Interest this high makes it incredibly hard to pay off debt. You find that each month, most of your money is going toward interest, and barely any of it is going toward the principal balance.

    And it’s not just credit cards with high interest. I’ve seen plenty of student loans, car loans, and personal loans with interest rates above 12%.

    If you have high-interest debt (which could be anything above 6 or 7 percent), you may want to prioritize that before increasing your retirement savings. With more money available in your monthly budget, you can pay well above the minimum payment and pay it down a lot faster than you otherwise would have.

    The reason to prioritize these debts above saving and investing is that the interest rate on them is higher than the rate of return you’re likely to get in your retirement account. If your retirement account is seeing an 8% return rate and your debt has an interest rate of 20%, you really aren’t making money — you’re losing money.

    Read More: How to Pay Off Credit Card Debt Fast

    Consider the interest rate of your debt

    Once your high-interest debt is gone, you’re probably left with student loans, car loans, or a mortgage with rates of anywhere from 3% to 6%. Once you get to this point, it’s a good idea to increase the amount you’re contributing to your retirement accounts.


    Because, at this point, the rate of return you can get on your investments is likely higher than the interest rate you’re paying on your debt. If your retirement account sees an average 8% return and your student loans have a 4% interest rate, you’re making more on your investments than you’re losing on loan interest.

    For each individual debt, consider the interest rate. Is it higher or lower than the average stock market return (which has been about 10% annually over the past century)?

    Another reason to save for retirement if you can — retirement accounts are tax-advantaged. Depending on the type of account, this means that you either aren’t paying taxes on the money you contribute or you contribute money post-tax and then won’t pay taxes when you withdraw it. 

    Read More: Debt Snowball vs. Debt Avalanche: Which Debt Payoff Strategy is Right For You?

    I do want to acknowledge that there’s an emotional component to paying off debt. Regardless of the interest rate on your debt, it may be weighing on you too much to prioritize investing, and that’s okay.

    Personal finance isn’t always about doing the thing that will get you the best return in the long run. Sometimes it’s about doing the thing that will bring you the most happiness and peace of mind.

    How to save for retirement while paying off debt

    So you’ve decided that you want to contribute to retirement while paying off debt. Great! But where do you start?

    First, sit down and look at your monthly budget. After you account for your monthly bills, how much is left? Once you know how much money you have to work with, treat both your retirement savings and your debt payoff as line items in your monthly budget.

    Deciding how much to contribute to each is up to you. But there are a few tools I recommend to find some guidance in this area:

    • This debt payoff tool allows you to add all of your debt accounts, and then it helps to design a debt payoff plan for you. It helps determine which order to prioritize your debts in, and then shows you how quickly you can be debt-free depending on the amount you put toward debt each month.
    • Empower Retirement Planner: There are plenty of retirement calculators out there, but this one is my favorite. You input information such as your annual income, current retirement savings, age, and desired income during retirement. Then it tells you whether you’re on track to reaching your retirement goals and how much you should contribute each month to get there.

    Final thoughts

    One of the reasons it’s so hard to find the perfect personal finance advice is finances are just that — personal. What works for someone else may not exactly work for you, and vice versa.

    That’s why it helps to look for general guidelines, and then you can adapt them to fit your specific situation.

    Debt and retirement, in particular, are some of the more stressful financial topics we all face. You want to make sure you’re putting enough money toward each, while still having money in your budget to enjoy your life.

    Trust me, I understand the struggle!

    I talk to so many people who want to know if they should pay off debt or save for retirement. And as you can see, you can do both!

  • How to Pay Off Credit Card Debt Fast

    I know first-hand how financially and emotionally draining credit card debt can be.

    The interest rates on credit cards are insanely high, making it hard to make real progress paying while it off. But they are also all kinds of crazy feelings that credit card debt brings up.

    Guilt from having gotten yourself into debt.

    Resentment at whatever outside factors led to you going into debt.

    Fear that you’ll never pay off the debt.

    Trust me, I’ve been there and I’ve felt all of those feelings. But I’ve also learned how to overcome the roadblocks that keep us in debt, and so in this article, I’m teaching you how to finally pay off your credit card debt and how to do it fast. 


    How to Pay Off Credit Card Debt Fast

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Pay more than the minimum payment

    Have you ever rationalized paying just the minimum payment on your credit card because that’s all you “had to” pay? Or told yourself it wasn’t a big deal because it was such a small amount every month?

    Credit card debt can be deceiving. It seems like it’s not a big problem because the monthly payments are so low.

    But here’s the catch — the minimum payments are low because credit card companies want you to stay in debt.

    Every month that you don’t pay off your balance in full, they get to charge you interest. That’s how they keep making money off you.

    I’m going to let you in on an eye-opening fact.

    If you have $5,000 in credit card debt with a 22% interest rate (fairly standard for millennials) — you wanna know how long it’s going to take you to pay it off?

    23 years.

    Yes, you read that right. $5,000 will take you just over 23 years to pay off. And the even scarier number?

    You’ll pay over $8,500 in interest.

    Now that you understand how important it is to get this debt paid off fast, you’re ready to dive into the rest of the tips.

    Read More: How We’re Planning to Pay Off Six Figures of Debt


    Focus on one debt at a time

    When I get new clients that have credit card debt, they’ve usually tried to tackle their credit card debt before. They know they need to make more than the minimum payment, so they pay a little extra to each card every month.

    Here’s the problem with that strategy: you’re paying each card off slightly faster than you would have, but aren’t really gaining any momentum.

    Rather than spreading your extra cash over all of your debts, focus on one and go all in. 

    Now you might be asking yourself — how do you decide which debt to focus on first?



    The two most popular debt payoff methods are the debt snowball and the debt avalanche.

    Debt snowball

    With the debt snowball, you make the minimum payment on all of your debts except the one with the smallest balance. You put any extra money each month toward that debt.

    Once you pay off the smallest debt, you take all the money you were putting toward it and instead put it toward your next smallest debt. Do that until you’ve snowballed into one giant monthly payment you can pay toward your biggest debt


    Debt avalanche

    The debt avalanche is similar to the debt snowball. But instead of paying off your debts smallest to largest, you first focus on the debt with the highest interest rate and slowly work your way toward the small interest rate.

    While the debt snowball gives you emotional victories when you pay off your smallest debts, the debt avalanche will actually save you the most money, since you’re tackling that high interest first.


    Use a balance transfer to lower your interest

    I’m going to be upfront and tell you that there are some mixed reviews in the personal finance world when it comes to balance transfers. Let me tell you where I stand.

    I’m a huge fan of balance transfers.

    A balance transfer is when you open a new credit card and then transfer the balance of an old credit card to the new one. 

    These are a useful tool because when you open a new card, you typically get 12-18 months interest-free. This can help you to pay off your credit card debt much faster.

    The reason that some personal finance experts recommend against balance transfers is that they act as an enabler. People transfer their balance, but then continue making the minimum payment.

    With my money coaching clients, that’s simply not allowed. We use these cards as a tool to help you pay off your debt way faster because your money isn’t going toward interest. 

    If you’re going to use a balance transfer card, you have to commit. Commit to making more than the minimum payment so you can pay the card off before the interest kicks in.

    Interested in learning more? I have an entire guide about balance transfers and how to do one. Additionally, here are my favorite balance transfer cards for paying off credit card debt:

    • Chase Freedom Unlimited: This is hands-down my favorite all-purpose credit card. It comes with higher cash back than you’ll find on many other cards, along with extra rewards on bonus categories. Plus, it offers 0% for 15 months on balance transfers.
    • Capital One Quicksilver: This was my very first credit card, and it’s one I still have in my wallet. In addition to the cash back rewards it offers, you’ll get 0% for 15 months on all balance transfers.
    • Discover It Cash Back: This card is another one I’ve had for years, and it offers elevated cash back on certain bonus categories. Plus, you’ll get 0% for 14 months on all balance transfers.


    Try a debt consolidation loan

    A debt consolidation loan is when you borrow money from a financial institution (typically in the form of a personal loan) to pay off your credit cards. Then, rather than making several monthly payments to several credit cards, you have just one monthly payment.

    I think debt consolidation loans can be a useful tool for people who have a lot of credit card debt and either can’t get a balance transfer card big enough to pay it all off or who know they won’t be able to pay the debt off within the next year or two.

    Debt consolidation loans come with fairly high interest rates, so they aren’t my first choice. But if a balance transfer card doesn’t work for your situation, then this type of loan can help you save money and pay your debt off faster.


    Figure out where you can cut costs

    I’ve got some news that you probably aren’t going to like. Finding the right tools, like balance transfer cards and debt consolidation loans, isn’t going to get your credit card debt paid off.

    What’s actually going to do the trick is putting more money toward your debt. And in most cases, that requires cutting back on some expenses.

    You might think you’ve done everything you can to cut back and that there’s nowhere else that you can save. And that might be mostly true, but here are a few other ideas to consider:

    • Start a budget. Far too many people don’t have a budget to help them organize their money. If you don’t have one, start one. If you do have one, review it and see where you’re spending a lot of money that you could spend less. 
    • Negotiate your bills. For most of us, it doesn’t occur to us to negotiate our monthly bills. But you totally can! And better yet, an app like Trim can do it on your behalf.
    • Use cash-back apps. There are plenty of apps out there that give you cash back for purchases you make online and in-store. My favorites are Rakuten for online purchases and Ibotta and Fetch Rewards for in-store purchases.

    Read More: 17 Ways to Save Money on a Tight Budget


    Increase your income

    There are only two ways to make more room in your budget: cut your expenses or increase your income. And you and I both know we can only cut our expenses so much. But there’s no cap on how much you can earn.

    There are so many ways to increase your income. Some of my favorites include:

    • Become a freelancer. While working full-time, I was also making thousands of dollars per month as a freelance writer. It finally allowed me to quit my job, and I still freelance write alongside my money coaching business. You can freelance doing just about any type of job!
    • Join the gig economy. Apps like Uber, Doordash, Rover, etc. allow you to perform tasks for other people and get paid. You can do it whenever you have time in your schedule.
    • Get a second job. When Brandon and I were saving for our RV, he worked a few nights per week as a bartender after working at his full-time job. He was able to save a ton during that time!

    Check out lots of more ideas on how to make an extra $1,000 per month.


    What to do after you pay off your debt

    Up until now, we’ve been talking about how to pay off credit card debt. But what happens when you’ve paid it all off?

    I’d love to tell you that you’re home free, but that’s not necessarily the case. Many people pay off their credit card debt, only to get themselves right back in it. And on top of that, there’s some bad advice out there about credit cards, so I want to set the records straight.



    If you follow Dave Ramsey, he’s going to tell you to cut up your credit cards and close your accounts. He’ll try to convince you that’s the only way to be financially free.

    He’s wrong.

    We’ll talk more about how (and why) you can use credit cards responsibly, but right now, I’m just going to tell you to keep the accounts open.

    Your credit score is based on a handful of factors, including your credit utilization and your age of credit. By closing your credit accounts, you’re getting rid of your available credit (aka screwing up your credit utilization). You’re also destroying your age of credit.

    Both of these things can lower your credit score. And if you ever plan to get a loan, a credit card, an apartment, etc., you’ll need your credit score.

    It’s easy for Dave Ramsey to tell you that you don’t need a credit score because you should buy everything in cash. Dave Ramsey is rich and can buy everything in cash. If you’re not likewise rich, this is bad advice.



    There are many reasons people get into credit card debt. Maybe a financial emergency popped up, like unforeseen car repairs or medical bills. Or maybe you have a problem with impulse spending or emotional shopping.

    In my case, it was a couple of factors. I had just gotten divorced, and my ex-husband got basically all the money and stuff. He also made more money than I did. I had to charge a lot on credit cards to get a new apartment and buy new stuff.

    But I also struggled with emotional spending. While we were still married, I would shop to avoid being at home. And after the divorce, I would shop to distract myself from the anxiety I was feeling.

    Now, it’s unlikely I will find myself in that situation again. My current marriage is pretty freaking awesome. But now I know I need to be more prepared for financial emergencies, so I keep a large emergency fund.

    The emotional shopping was a little different. I couldn’t just pay off the debt and ignore the problem. Otherwise, it would have kept happening over and over again.

    Instead, I had to find a way to deal with my emotions other than shopping.

    Really try to get to the core of why you got into credit card debt. Once you know that, you can put safety nets in place to make sure it doesn’t happen again.

    Read More: How to Reduce Impulse Buying Once and For All



    I think credit cards are awesome for so many reasons. First, I love that using a credit card builds my credit score. And having a good credit score allows me to get better deals on loans.

    I also love credit card rewards. My husband and I use both cashback and travel rewards cards. We have a strategy behind how we use them, and we love getting a little free money in our bank account or saving money on travel.

    Finally, I love the perks that come with credit cards. They include:

    • Fraud protection. If someone uses your credit card, you can dispute the charge, and your credit card company won’t make you pay it. This also works if you genuinely buy something but then the seller doesn’t deliver on a promise.
    • Free credit monitoring. Credit card companies keep you up-to-date on your credit score and let you know if anything new was added to your credit report.
    • Random discounts. Depending on what credit card you use, there’s a chance the company may partner with other companies to get you discounts on random stuff.



    You know that you should use credit cards responsibly, but you’re probably wondering what that actually looks like.

    1. Only spend money you already have. People tend to get into a cycle where they put everything on a credit and then pay it off the following month. The problem is that they’re usually using next month’s income to pay this month’s bills. Instead, only spend money that’s actually in your checking account already.
    2. Stay below 30% of your credit limit. Your credit utilization is a big part of determining your credit score. If you use more than 30% of your credit limit, it’ll negatively impact your score.
    3. Pay your balance in full every month. Never carry a balance over. There are myths out there that it only boosts your credit score if you carry a balance. This is incorrect.


    Final Thoughts

    When you’re stuck in credit card debt, it feels like you’ll never get out. But I promise you, that’s not true. Using the tips in this post, you can start making major progress on paying off your credit card debt.

  • How to Pay Off Debt Faster with a Balance Transfer

    When my ex-husband and I got divorced, I found myself completely starting over financially. I didn’t have anything in savings, and I had to rely on credit cards to get my fresh start.

    When I signed up for my credit card, I got a promotional offer of one year with 0% interest. I was so sure I’d be able to pay it off in time.

    Fast forward twelve months, and I was still carrying a balance. And when I saw what my monthly interest charge was, I was horrified. I knew right away I had to figure out an alternative solution.

    That’s where balance transfers come in. After doing some research, I decided that applying for a balance transfer card would be the best way to aggressively pay down my debt without losing money to interest.

    One of the most common questions I get from readers is whether a balance transfer is a good option to help pay off debt faster.

    Considering most American households are carrying some sort of credit card debt, it’s not really a surprise that I get this question often.

    In this article, I’m sharing what a balance transfer is, how it can impact your finances, and how to decide if it’s the right choice for you.


    How to Pay Off Debt Faster with a Balance Transfer

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    How does a balance transfer work?

    A balance transfer is when you transfer the balance of an existing credit card to a new credit card. In other words, you’re using a credit card to pay off your credit card debt.

    The reason these transactions are so popular is that many credit card companies offer a 0% promotional period on new balance transfers. 

    Let’s say you’ve got $5,000 in credit card debt with an interest rate upwards of 20%. By using a balance transfer, you can move that $5,000 to a new credit card and pay 0% interest for the first 12-18 months.

    This move can save you money in interest, and help you to pay off your credit card debt faster than you otherwise would have.


    Is it a good idea to do a balance transfer?

    Balance transfers can be an amazing tool for anyone working to pay down credit card debt. Here are a few perks:

    • Save money on interest. 0% credit card interest can save you SO much money. Let’s say you have $2,500 of credit card debt with 24% interest (not at all uncommon these days). If you pay your card off in 12 months, you’ll pay over $300 in interest. If you do a balance transfer and pay 0% interest, you’ll save yourself hundreds of dollars.
    • Pay off your debt faster. One of the reasons credit card debt is so hard to pay off is that a huge chunk of your monthly payments go toward interest. You’re often barely making a dent in your balance. By getting rid of interest for a while, all of your money goes toward the principal and you’ll pay off your debt WAY faster.


    Is there a downside to balance transfers?

    Balance transfers can be a great way to buy yourself some time while you pay off your credit card debt. But there are some downsides to consider as well.

    • Expect to pay some fees with your balance transfer. It’ll vary depending on the card you choose, but the fees are typically 3-5% of the total balance you’re transferring. Usually, this small fee is worth it, but it’s best to run the numbers for your specific situation.
    • Balance transfer offers aren’t available to everyone. Cards with 0% balance transfers are primarily available to those with good or excellent credit. The best offers will be reserved for those with excellent credit.
    • If you haven’t addressed the issues that caused you to go into credit card debt in the first place, I wouldn’t recommend a balance transfer. You may find yourself going into even more debt as a result of the extra credit available to you.


    Do balance transfers affect your credit score?

    Balance transfers can definitely impact your credit score, but it’s difficult to say what the effect will be for any one person. 

    First, applying for a credit card places a hard inquiry on your credit report. This can result in a slight drop in your score.

    Next, opening a new credit card will shorten your average length of credit. The longer your credit history the better. So lowering your average may cause your score to drop.

    Finally, opening a new credit card will increase the total amount of credit available to you. As long as you don’t rack up more credit card debt, your credit utilization (aka the percentage of your total credit you’re using) will go down. As a result, your credit score can increase.

    Keep in mind that if you struggle with impulse spending, especially when it comes to credit cards, then opening a new card can seriously hurt your credit in the long run. Only open a card if you feel confident you won’t take on more debt.


    How to do a balance transfer

    Ready to start the balance transfer process and pay off your credit card debt faster? Here are the steps to follow:

    1. Check your credit. 0% balance transfer cards are reserved for people with good or excellent credit. You may not want to apply and have a hard inquiry in your credit report if you won’t qualify.
    2. Choose the right card for you. There are plenty of balance transfer cards on the market, and each one comes with its own perks. Do some research and decide which card best fits your needs.
    3. Decide how much to transfer. Once you’re approved for your balance transfer, it’s time to decide how much to transfer. It’ll depend heavily on how much credit you’re approved for. You can’t transfer more credit than your new credit card company is willing to extend to you.
    4. Make a debt payoff plan. When it comes to balance transfer deals, it’s ALL about the follow-through. Transferring your balance to a new card is only worth it if you’re going to use this opportunity to pay down your debt. You can use a tool such as Undebt.It to help you plan your debt payoff.

    As you’re working your way through the balance transfer process, remember one very important thing: the balance transfer is not immediate. It can take anywhere from a few days to a few weeks for your transfer to go through.

    While you wait for the deal to close, you still have to make your normal monthly payments to your old credit card company. Failing to do so can have a huge negative effect on your credit score!


    The best balance transfer credit cards

    A quick Google search will help you find plenty of credit cards specifically tailored at balance transfers to help you pay off credit card debt faster. I’ve got some personal experience with balance transfer cards, so I’m sharing a few of my favorite balance transfer cards on the market:

    • Chase Freedom Unlimited: This is hands-down my favorite all-purpose credit card. It comes with higher cash back than you’ll find on many other cards, along with extra rewards on bonus categories. Plus, it offers 0% for 15 months on balance transfers.
    • Capital One Quicksilver: This was my very first credit card, and it’s one I still have in my wallet. In addition to the cash back rewards it offers, you’ll get 0% for 15 months on all balance transfers.
    • Discover It Cash Back: This card is another one I’ve had for years, and it offers elevated cash back on certain bonus categories. Plus, you’ll get 0% for 14 months on all balance transfers.


    Final Thoughts

    Credit card debt is a huge struggle for so many Americans today. Often we open a credit card with the best of intentions, but impulse spending or a financial emergency causes us to go into credit card debt.

    The good news is that a balance transfer can be an amazing tool to help you pay off your debt faster without wasting a ton of money on interest.

  • Debt Snowball vs. Avalanche: Which Debt Payoff Strategy is Right For You?

    I spent years paying off debt with absolutely no plan in place.

    I would make the minimum monthly payments on my student loan each month. I also applied for the income-driven plans to try to reduce my monthly payments even more.

    When I started taking on credit card debt after my divorce, I did the same thing. I made the minimum monthly payments. I figured it wasn’t a big deal since my credit card had an interest-free promotional period.

    Eventually, it became clear this plan (or lack thereof) wasn’t going to cut it anymore. 

    First, the interest-free period on my credit card ended, and I realized just how damaging a 20% interest rate can be.

    Then my husband and I got married and had a combined six figures of debt. We knew we didn’t want that much of our monthly income going toward debt forever. 

    When we decided to get serious about paying off debt, I spent a lot of time playing around with different scenarios. I knew that the debt snowball and debt avalanche were the two most popular debt payoff plans, and I wanted to figure out which was best for us. 

    We ultimately chose the debt avalanche method to pay off our debts. It isn’t necessarily the right choice for everyone, but it absolutely is for us!

    In this post, I’ll dive into the different debt payoff plans — the debt snowball vs. avalanche. I’ll share the pros and cons of each and why we went the route we did!


    Debt Snowball vs. Avalanche: Which Debt Payoff Strategy is Right For You?


    Debt snowball vs. avalanche: Two popular debt payoff methods

    The debt snowball and debt avalanche are two popular strategies designed to help people pay off their debts. These methods give you a framework to follow so you know the order in which to prioritize them.

    The two methods have some things in common, including how they start. For both the snowball and the avalanche, you start by writing out a list of your outstanding debts, including your student loan, car loan, personal loan, credit card balance, and more. The only debt you might choose to leave off the list is your mortgage.

    That’s largely where the similarities end. Once you’ve listed all your outstanding balances, you prioritize your debts differently depending on the method you choose.

    Of course, there is no best way to pay off debt for everyone. Instead, different people will find a certain method that works best for them. But by sharing some of the pros and cons of these two popular methods, you can get an idea of which you may prefer.

    What is the debt snowball?

    The debt snowball is a debt payoff plan where you pay your smallest debts off first. Each time you pay off a debt, you snowball the money you’re saving into your next smallest debt.

    Here’s how the debt snowball strategy works:

    1. Make a list of all of your debts, from smallest to largest. 
    2. Decide how much you can afford to put toward debt each month. Ideally, this number will be larger than the sum of all of your minimum payments. 
    3. Make the minimum monthly payment on each of your debts except the smallest. Put the extra money each money toward that smallest debt.
    4. Once you pay off the smallest debt, take the money you were putting toward it each month and start putting it toward your next-smallest debt. 
    5. Each time you pay off a debt, your snowball will get bigger and bigger. Once you get down to the last debt – meaning the one with the largest balance – you’ll be putting your entire snowball toward it each month.



    The debt snowball gives you quick wins. By paying off your debts from the smallest balance to the largest, you get to celebrate another debt paid off more often. This can be a huge motivator!



    The debt snowball only considers the size of each debt, not the interest rate. This could result in you paying more in interest than if you did the debt avalanche. 


    What is the debt avalanche?

    The debt avalanche is a debt payoff plan where you pay off your debts in order of the interest rate, starting with the highest interest rate and working your way to the lowest. 

    Here’s how the debt avalanche strategy works:

    • Make a list of all of your debts, ordering them from the largest interest rate to the smallest.
    • Decide how much you can afford to put toward debt each month. Ideally, this number will be larger than the sum of all of your minimum payments. 
    • Make the minimum monthly payment on each of your debts except the one with the highest interest rate. Put the extra money each money toward that debt.
    • Once you pay off the highest-interest rate debt, take the money you were putting toward it each month and start putting it toward the one with the next highest interest rate. 
    • Each time you pay off a debt, your avalanche will get bigger and bigger. Once you get down to the last debt – meaning the one with the lowest interest rate – you’ll be putting your entire avalanche toward it each month.



    • The debt avalanche is the method that will have you paying the lowest amount in the long run. Because it requires you to pay down your high-interest debt first, you end up saving money.



    • And depending on how big your high-interest debts are, you might not have any wins for a while. It really doesn’t account for the fact that debt (and money in general) is a super emotional topic for most of us. 


    Which is best: Debt snowball vs. avalanche?

    Let me preface this by saying that personal finance is just that: Personal. And because of that, there’s rarely one financial decision that’s best for everyone.

    Having said that, I really encourage readers to use the debt avalanche in almost all cases. From a financial perspective, the debt avalanche is the better choice. 

    It will have you paying your debts off faster and saving money on interest. And depending on how much debt you have, the difference could be significant. 

    My husband and I have six figures of student loan debt and previously had significant consumer debt, and the difference between the debt snowball and debt avalanche was thousands of dollars! 

    If you want to see just how the numbers add up for you, you can use an online debt snowball vs. avalanche calculator or sign up for a free tool like, which helps you create your debt payoff plan and shows you which method makes the most sense for you.

    The only time I recommend the debt snowball is if you really struggle to stick to any sort of financial plan but are really motivated by wins. 

    Any debt payoff plan is better than no debt payoff plan at all. So if those little wins will be the only thing keeping you going, then that’s the right plan for you! 


    Other debt payoff methods to consider

    While the debt snowball and debt avalanche are the most popular of the debt payoff methods, they certainly aren’t the only ones. Some people choose to use a different method entirely or use a hybrid of the snowball and avalanche.

    When using a hybrid debt repayment method, you would use both the balance and interest rate of each debt to determine the order in which you pay them off.

    For example, the debts with the highest interest rate generally take first priority. But if you have a very small debt with a lower interest rate, you might pay that one off first just to get it out of the way.

    Another factor that people consider when prioritizing their debts is the emotional burden they create. When I had to take on credit card debt after my divorce, I had very strong feelings about that debt.

    More than any other debt I had, I just wanted it gone. Even if it had a lower interest rate than my other debts, I still would have paid it off first just to live with that emotional burden.


    What about other debt management tools?

    In addition to the frameworks available to help you pay off debt, there are also a few tools that people often turn to. These tools include balance transfer credit cards, debt consolidation loans, and more.

    In the right circumstances, these tools can absolutely be a good fit. Here are some articles that can help you determine if they’re right for you:


    Final Thoughts

    Hopefully, this post gave you a good overview of the debt payoff plans available to you. There isn’t one right choice that works for everyone. But one of these plans is sure to work for you!

  • Can You Pay Off Debt and Save For Financial Goals at the Same Time?

    If you’ve been reading this blog or following me on social media, you might know that my husband and I had a combined six figures of student debt when we got married. As soon as we said “I do,” we started an aggressive debt payoff plan.

    But you may also know that a few months after getting married, my husband and I bought an RV and got rid of our apartment so that we could travel across the United States full-time.

    So how did we rationalize spending money on other financial goals while paying off debt? And how did we get around the difficult decision many people face of whether to pay off debt or save?

    The good news is that you can do both! You can pay off debt early and still make room for other financial goals in your budget. There are a few things I recommend checking off the to-do list before saving for other goals, which we’ll cover later. 

    In this post, we’ll answer the question of whether you can save for financial goals while paying off debt and how to actually do it. 



    Make a plan to pay off your debt

    Before prioritizing any other financial goals, I recommend sitting down and crafting a solid plan to pay off your debt. This plan should include how much you’ll put toward debt each month and which debt you’ll pay off first. Once you know these details, you’ll know exactly when you’ll have your debt paid off. 

    I previously shared on this blog how we plan to pay off our six figures of debt.


    Make sure to build your emergency fund first

    Before saving for any other financial goals, your first priority should be to build an emergency fund. I wouldn’t put money toward other goals until you have this in place. 

    How much to save depends on several factors. While some personal finance experts recommend saving $1,000, I just don’t think that’s enough. If you unexpectedly lose your job, $1,000 likely isn’t enough to cover your bills for even one month. 

    I recommend saving at least 3-6 months of expenses. If you have a partner who can cover your expenses if you lose your job, you might be able to get away with three months. If you have irregular income or are self-employed, you may want closer to 9-12 months of expenses saved. 

    I also know that saving that much before you start tackling your debt can be difficult, so I recommend starting with at least one month of savings before turning your attention to pay off debt or save.


    Prioritize high-interest debt

    I don’t generally advise that people put their lives on hold while paying off debt. The one exception: high-interest credit card debt. 

    Unlike most debts, the interest rates on credit cards can exceed 20%. I know first-hand just how quickly that interest adds up when you are only paying the minimum payment each month. If you have credit card debt, I recommend putting all of your extra money toward that until it’s gone. 

    If you aren’t sure how to prioritize your debt, consider reading up on the debt snowball and debt avalanche methods, which create a framework to help you break down your debts in a way that makes sense financially.


    Treat your goal like a line item in your budget

    I know plenty of people who don’t think you should be spending money on other goals while paying off debt. But you’re already spending money on things. You’re probably paying for rent or a mortgage. You pay for groceries, insurance, the occasional night out, etc. 

    You’re able to spend money on these things because you make room for them in your budget. So when it comes to saving up for other financial goals, I recommend treating it just like any other line item in your budget. Just make sure it fits with your debt payoff plan! 


    Don’t take on any additional debt

    I probably don’t need to tell you this, but don’t take on more debt while you’re paying off debt! 

    I know how easy it can be to tell yourself that since you already have credit card debt, putting a little more on your card won’t make a big difference. It’s time to change your thinking here.

    I’m all for people going after goals such as vacations, weddings, or whatever it is you’re saving up for right now. But if you can’t afford to pay for these things in cash, don’t do them. Putting expenses on your credit card while paying off debt isn’t something I’d ever recommend. 

    In fact, only buying things you can afford to pay for in cash is just generally a good rule of thumb to follow, regardless of whether you already have debt. 


    Figure out where you can cut costs elsewhere

    I firmly believe that people can pay off debt and save for other financial goals at the same time. But most of us don’t have an unlimited supply of money, meaning you’ll probably have to make cuts elsewhere

    Go through your budget and figure out where you can cut. For example, do you really need to be eating out for lunch every day? Could you pack a lunch instead?

    I generally recommend cutting things that aren’t really important to you but that you spend money on for convenience or because you’re with other people who spend money on them. 

    You can also look at your financial goals and see where you can cut there. For example, could you take a more affordable vacation or save for a downpayment on a smaller house?

    My husband and I were planning our wedding while paying off debt. We decided early on that a big, expensive wedding just wasn’t a priority for us. We saved a lot of money on our venue, the food, our alcohol, and decorations without having to sacrifice having a wedding day we loved. 


    Final Thoughts

    I know how it can feel to be paying off a ton of debt and feel like you can’t spend money on yourself anymore. And while I’m all for making sacrifices to pay off debt faster, I also think there’s room for everything in moderation! 

    Whether it’s a vacation, a wedding, a downpayment on a home, or anything else, I firmly believe that you can make room for other goals in your budget while paying off debt.

  • 5 Money Mindset Shifts to Help You Pay Off Your Debt

    When Brandon and I got engaged, I knew that I wanted to come up with a plan to pay off our debt more quickly. After all, we had a combined six figures of debt, and I didn’t want that hanging over our heads for decades. 

    I knew that much debt would be a lot of work, but at that point, I had already dove into the world of personal finance. I knew the practical tips to follow to pay off debt faster. 

    And yet, I found myself struggling to sit down and come up with a real plan to put in place. 

    It took me a while to learn that it wasn’t the logistical steps of paying off debt that I was struggling with — It was the mindset. 

    All of the best advice in the world isn’t going to help you crush your debt if your mindset isn’t in the right place. 

    In this post, I’m sharing the five mindset shifts I had to make to help me pay off my debt. They can help you pay off your debt too!



    Let go of the victim mentality

    It took me a long time to stop playing the victim when it came to my debt and instead start taking responsibility for it. 

    I would blame the system for my student loan debt. I was angry to live in a country that puts people tens of thousands (if not hundreds of thousands) of dollars into debt for a degree.

    And I didn’t just do this for my own debt! I went through another round of it when my husband and I got married, as he had even more student loan debt than I did.

    I would also blame my ex-husband for my credit card debt. I believed that he had forced me into that situation through the circumstances of our divorce.

    And honestly, sometimes it feels better to have someone else to blame. It’s comfortable to believe that it’s not your fault. 

    But here’s the thing: Until you learn to take responsibility for your debt, you’ll continue to let that victim mindset keep you in debt. 

    In other words, you’ll believe that since you aren’t the one who got yourself into debt, you can’t be the one to get yourself out of it. 

    Once you really take responsibility for your debt and acknowledge that you took it on, you’ll understand that you and you alone have the power to eliminate it. 

    I do want to acknowledge that there are absolutely societal and structural problems that lead to people having debt that feels unmanageable. I don’t want to ignore those issues. But for the purposes of paying off your debt, I think it’s more helpful to focus on the things you can control.


    Let go of any shame or guilt

    It’s important to take responsibility for your debt, but it doesn’t help you to carry shame or guilt over it.

    In a perfect world, none of us would have debt. In a perfect world, you would have found a different solution rather than borrowing money. 

    But we don’t live in a perfect world. And more importantly, there’s absolutely nothing you can do today to go back and change the decision you made. 

    The more time you spend sitting in shame and guilt regarding your debt, the less time you spend focusing on how you can pay it off more quickly. 


    Be grateful for your debt

    You’re probably reading this and thinking that it sounds ridiculous to be grateful for your debt. But hear me out. You can find something good that has come of your debt if you look hard enough.

    Maybe it’s that you really love your job, and you only could have gotten it with a college degree. For that reason, you can be grateful for your student loans. 

    Maybe it’s that taking on credit card debt is what allowed you to leave a bad relationship and start over somewhere else, even if you couldn’t do it in cash. 

    Or maybe you’re like me, and your debt helped you to get back on track financially. If I hadn’t been stuck with credit card debt after my divorce, I wouldn’t have learned finance. And if I hadn’t learned finance, I wouldn’t have my business today. 

    Having debt is also what helped my husband and I to get so serious about budgeting. Sure, it’s still going to take us years to pay off our six figures of student loan debt. But when the debt is gone, we’ll have those good money habits forever. 


    Believe that you can pay off your debt

    Have you ever talked yourself out of getting serious about paying off debt because you felt like no matter what you did, you’d never get there?

    That’s what limiting beliefs do. They stop you in your tracks and prevent you from making real progress. 

    At the end of the day, you won’t be able to pay off your debt until you really believe that you can. And once you believe you can, you’ll be amazed and the ideas you come up with to help you get there. 

    If you’re struggling with this one, something as simple as putting a post-it note on your desk with a positive reminder can be a huge help!


    Learn to think outside the box

    I can’t tell you how many times I stared at my budget, having no freaking clue what I was going to do, because there just wasn’t enough wiggle room to aggressively pay off my debt as fast as I wanted to. 

    I know so many people who are in this exact situation. They think they don’t make enough money to pay more than their minimum payments on their debt. 

    That’s when you have to get creative. 

    I decided that I didn’t want to cut anything else from my budget. I wanted to have the money for date nights with my husband and to spend money on things that bring us joy. 

    So instead of trimming my budget even more, I increased my income. For me, freelance writing was the answer. I already knew a lot about personal finance, so I decided to start writing for other people’s websites. 

    For you, it might be something else. Maybe you’ll give pet sitting a shot, or deliver groceries part-time. 

    There are so many options out there, you just have to think outside the box.


    Final Thoughts

    When I first started paying off my debt, I wanted all the tactical budgeting tips to help me get there. But what I eventually realized was that if I didn’t first fix my mindset, I’d never be able to fix my budget.

    If you’re struggling with debt, I sincerely hope you give some of these mindset shifts a shot.

  • Should I Refinance My Student Loans?

    When my husband and I got married, we had over six figures of student loan debt. It wasn’t exactly the ideal way to start our life together. 

    However, it did force us to have a lot of money conversations early on and make sure we were on the same page with our finances. And for that, I could not be more grateful. 

    One of the topics of conversation was the fact that, while most of our debt was from federal loans with reasonable interest rates, he had one private student loan with an astronomical interest rate — About 14%. Yeah, that was painful. 

    One of the first money decisions we made together was to decide to refinance that private loan. With literally only a few minutes of effort, we were able to reduce his rate by about 60%. When we ran the numbers, we found that we were saving ourselves tens of thousands of dollars over the life of the loan. 

    Refinancing a student loan is an amazing way to reduce your interest rate and save yourself a ton of money in the long run. 

    In this article, you’ll learn what student loan refinancing is, whether student loan refinancing is the right choice for you, and how to refinance a student loan. 


    Should I Refinance My Student Loans?

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    What is student loan refinancing? 

    Refinancing a student loan is essentially taking out a new loan to replace your old one. When you refinance a student loan, you take out a loan from a private lender. That lender pays off your existing loan, and you now have a new loan with new terms, a new interest rate, and a new monthly payment. 

    You can refinance both private and federal student loans, though certain types of loans may make more sense for refinancing. 

    How do I know if refinancing is right for me?

    The primary reason to refinance a student loan is to save money over the life of the loan as a result of a lower interest rate. In the case of my husband and I, we reduced our loan by more than 60% and saved our future selves tens of thousands of dollars. 

    Here are some reasons that student loan refinancing might be the right choice for you:


    If you have a large amount of student loan debt like we did, it will still likely take years to repay, even with the most aggressive payment plan. For that reason, any reduction in interest rate would have been worth it for us. If you know you’re going to be paying down your loans for many years, refinancing to a lower rate is definitely worth it.


    Even if you don’t have a ton of student loan debt, a high interest rate can be miserable. I know far too many people who see their student loan balances increase because of interest. If you have a high rate right now, refinancing is definitely something to consider. 


    While it would be amazing if everyone could refinance to a lower interest rate, that’s simply not how it is.

    Just like qualifying for any other loan through a private lender, refinancing your student loans with a low rate will require you to have a credit score and income that makes you a desirable loan candidate. If you do have an excellent credit score, you may be able to get a really good rate. 


    A major benefit of student loan refinancing is that you can consolidate your private student loans into just one loan. For example, let’s say you have five smaller student loans with five separate payments. Depending on the size of those loans, you could consolidate them into just one loan with a single monthly payment. You have fewer payments to keep track of, and may even find that your monthly payment is lower.

    How do I refinance my student loans?

    Alright, we’ve talked about what student loan refinancing is and when it might be the right choice for you. But how the heck do you actually do it? Luckily, it’s a lot easier than you may think.


    First of all, I definitely recommend doing a quick review of your financial situation before applying for any loans. The last thing you want is to fill out an application and find that your credit score has unexpectedly dropped or that you have a negative mark on there. 

    Checking ahead of time will help you to avoid any unwelcome surprises. If you check your report and your score has dropped or there’s a negative mark, you may want to take some time to get that ironed out before refinancing. 


    Don’t just pick a lender because someone else used them. Spend some time shopping around. Lenders will allow you to fill out a prequalification form, and it only takes a few minutes. That way, you’ll be able to compare a few different offers. 


    Once you have all the offers in front of you, you can choose whichever one is right for you. It usually makes sense to go with whichever company offers the lowest interest rate, but make sure to read all of the terms, such as the repayment period and forbearance options. 

    If you’re shopping for a loan to refinance your student loans, I recommend Credible. You can see rates from more than a dozen different lenders to find the best loan for your situation.


    After you choose a lender, you’ll probably have a bit more paperwork to fill out to finalize the loan. Then they’ll handle the process of paying off your old loan, and it’s just a matter of making your monthly payments. Just make sure to continue making payments on your old loan until you receive word that the refinancing is complete.

    When is refinancing not a good idea?

    Refinancing your student loans is an excellent choice for some people. In the case of my husband and me, refinancing his student loan is saving us tens of thousands of dollars over a period of several years. 

    But it’s also the case that refinancing simply isn’t for everyone. Let’s talk about a few of the reasons why you might be better off not refinancing your student loans. Some of these reasons are specific to people with federal loans, while others apply to anyone. 


    I won’t go so far as to say that no one should ever refinance their federal student loans with private loans, but I would advice against it in most cases for a few different reasons.

    First, there are several federal student loan forgiveness programs available to individuals working in certain fields, such as teachers and public servants. However, these programs are only available for federal loans. If you refinance loans with a private lender, you are no longer eligible for those programs. If you think you’ll be able to take advantage of one of those programs, you may be better off not refinancing. 

    Next, federal loans are the only ones that offer income-driven repayment plans. Like so many recent college graduates, I remember being so excited when I learned about income-driven repayment plans. After all, I was a low-paid government worker and wanted to be able to reduce my monthly student loan payment as much as I could. 

    Then it became clear that the lower my monthly payments, the longer it would take me to pay my loans off. For that reason, I generally don’t recommend income-based repayment plans (or limiting yourself to your minimum monthly payment). 

    That being said, I recognize that many of us go through situations in life (myself included) when our income is low and we just can’t swing a higher payment. Heck, one of the first phone calls I made after my divorce was to my student loan lender, asking them to lower my payment based on my income. 

    If you currently rely on an income-based repayment plan to afford your bill each month, refinancing is not for you. Private companies are far less likely to offer these plans.

    Finally, federal loans offer other protections that private loans don’t. For example, you can defer your loan payments if you go back to school, and can go into forbearance (meaning pause your loan payments) if you hit a financial rough patch. 

    Also, remember during the pandemic when the government dropped the interest rate on student loans to 0% and paused payments for several years? That perk only applied to federal loans. Borrowers with private loans continued to make payments and pay interest on their loans.


    The big benefit of refinancing your student loans is to reduce your interest rate. My husband and I were able to reduce his rate significantly by refinancing. But if you already have a very low rate or you shop around and find that you can’t qualify for a lower one, then refinancing is not for you. You definitely don’t want to refinance for a higher rate!

    If your credit history is preventing you from getting a better student loan refinance rate, take the next 6-12 months and work on boosting your credit score so you can try again in the future. 

    Final Thoughts

    I can entirely relate to the feeling that you’re never going to get those loans paid off. I understand the anxiety that comes with seeing the amount that you owe increasing each month rather than decreasing because your interest rate is so high. 

    Trust me when I say: I understand.

    Refinancing isn’t for everyone, but being able to refinance your student loan can be a serious game-changer for reducing your monthly payment, reducing your interest rate, and saving yourself a hell of a lot of money in the long run. 

  • Is it Better to Pay Off Debt or Save Money First?

    One of the questions I am asked most often is whether it’s better to pay off debt or save money first. And honestly, it wasn’t all that long ago that I was the one struggling with this dilemma. 

    When I was working to rebuild my finances, I read article after article that told said things like:

    • “Put all of your disposable income toward debt!”
    • “Build an emergency fund to fund 3-6 months of bills!”
    • “Max out your 401(k) and your Roth IRA!”

    As someone who was living paycheck to paycheck, I was crushed. How the hell was I supposed to do any of those things (let alone all three of them) when I could barely pay my bills every month? 

    Because of the amount of anxiety I had around this question, it honestly comes as no surprise that so many people are also struggling with it. 

    In this post, I’m answering that age-old question we’ve all had at one point or another. Which should you do first: pay off debt or save money?


    Is It Better to Pay Off Debt or Save Money First?

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Remember, it’s not one or the other

    First things first, you don’t have to choose between just saving money or just paying off debt. You can do BOTH. 

    I’m not saying it’s going to be easy. In fact, I can guarantee you it’s going to be tough. 

    The first thing you’re going to need to do is to take stock of where you’re at. First, take some time to figure out exactly how much debt you have. It sounds obvious, but I know far too many people who just blindly make their minimum payments every month without really paying attention to how much they owe. 

    My favorite tool to gather all of my debt information in one place is This tool allows you to add and manage all of your debt accounts, among other functions that we’ll cover later on.

    The other thing you need to consider is your life situation. How much money do you have coming in? How much money do you have in savings? What are your monthly expenses? All of these factors will help you choose between prioritizing saving money or paying off debt.


    Start by building your emergency fund

    Regardless of whether you have debt and how much debt you have, building your emergency fund should be your very first goal. How much you actually need in your emergency fund comes down to your comfort level, among other life factors. 

    To figure out how much of an emergency fund you need, really think carefully about where you are in your life and what you need out of an emergency fund.

    Today my husband and I both bring in income (I’m self-employed, and he has a good job). Because we share expenses, I know that if I were to lose all of my freelance income tomorrow, we’d be able to get by for a while on his income. 

    But just a few years ago, it was a very different story. A few years ago, I was single, living alone, and barely making ends meet. If I had lost my job during that time, it would have immediately been an emergency.

    Your life situation will tell you a lot about how much money you should have in savings. If you’ve got kids or are a one-income family, you’ll need a lot more of a cushion. 

    Alright, so how much should you save in your emergency fund?

    Dave Ramsey recommends putting $1,000 in your emergency fund before you aggressively pay off debt. I highly recommend more than that. There are plenty of house or car repairs that cost more than $1,000 on their own. And what about job loss? For most of us, $1,000 isn’t even enough to get by for one month. 

    As I said, how much you should actually save depends entirely on your lifestyle. I’m pretty risk-averse, so I would shoot for a minimum of a few thousand dollars. 

    Another thing to remember is that your emergency fund and your debt are totally intertwined. Nearly half of families don’t have enough to cover a $400 emergency. So when those emergencies do inevitably pop up, those families are going further into debt to pay for them.

    Having an emergency fund doesn’t prevent you from paying off your debt — It helps to avoid debt!

    Read More: How to Build an Emergency Fund & How Much You Should Save


    Take advantage of an employer 401(k) match

    Just like there’s a bare minimum for what you should save for your emergency fund, I also think there’s a minimum for what you should save for retirement.

    Listen, I know how hard it is to care about retirement when you’re in your early twenties. I was lucky enough to get a job out of college that had mandatory pension contributions, so I didn’t have the opportunity to opt-out. And let me tell you, I’m so grateful that was the case. 

    If you start saving for retirement in your forties, it’s going to seem overwhelming. If you start saving in your twenties, it’s going to be a hell of a lot easier and more painless.

    When it comes to saving for retirement, the most important factor you should look at first is whether your employer offers a match on your 401(k). If they do, take advantage of it. This is literally free money. Try to contribute as much as they’ll match. 

    If you can do more than that, that’s great. But if you’ve got a lot of debt to tackle, I would hit your employer match and then turn your attention to the debt. 


    Make a plan to pay off your debt

    If you’re going to prioritize paying off your debt, you need to have a plan in place. And no, making the minimum payment on all of your debts every month doesn’t count as having a plan.

    As I’ve mentioned on this blog before, my husband and I got married with six figures of debt (around $150,000 to be more specific). 

    Had we continued to make all of our minimum payments every month, we would have been paying off that debt for practically the rest of our lives. And after putting a plan in place to pay it off faster? We moved that timeline up by decades. 

    As you can see, there’s a pretty big difference there, and it’s all because we made a plan.

    To make our debt payoff plan, we used the tool

    The first thing you’ll do when you sign up for is to add all of your debt accounts. This means consumer debt, car loans, student loans, and any other debt you’re carrying. 

    Next, will prompt you to decide in what order you want to prioritize your debts. Essentially they’re asking if you want to do a debt snowball (where you prioritize the lowest debt amount) or the debt avalanche (where you prioritize the highest interest rates).

    The debt snowball is popular with lots of people working to pay off their debt. I understand, as paying off small debts can give you a lot of motivation. If that’s what you need, go for it. 

    We chose to go with the debt avalanche instead. Because of the amount of debt we have, paying off the high-interest debt first is going to save us tens of thousands of dollars in interest. 

    Once you’ve added all of your debts and have chosen what order you want to tackle them in, is going to ask you how much money you want to put toward debt every month. 

    This part is challenging and totally comes down to what fits within your budget. Try to find a number that is quite a bit more than just your minimum payments but still low enough that you have money to save and money to live a little. 

    I know there are plenty of people who think you shouldn’t spend any fun money until you pay off debt. I 100% don’t fall into that camp. If it’s going to take me years to pay off debt, my husband and I are going to go out to eat and go see our favorite bands while we’re at it. My opinion is that you should still set aside some money for things that bring you joy. 

    Once you’ve got your number, you’re done! At this point, will tell you when you’re scheduled to pay off your debt. You’ll have to go in monthly and manually enter the payments you’ve made. As an alternative, though, you can sync with the budget app You Need a Budget (YNAB), and it will automatically keep up to date with your balances. 


    Make a commitment not to go back into debt

    Paying off debt is glorious. We’ve got a long way to go before we’re debt-free, but even paying off just one debt is an amazing feeling.

    But paying off the debt isn’t enough. 

    For all of this to work, you also have to commit to yourself to never go back into debt (outside of a mortgage). 

    In some cases, this will be easy. Most of us aren’t planning to take on more student loan debt after we pay ours off. 

    But what about credit cards? Can you commit to never putting something on a credit card if you don’t already have the money to pay it off?

    Can you commit to saving up to purchase cars in cash rather than taking out a loan? 

    After paying on my car loan for years, I was determined that we’d purchase our next car in cash. It might not be the nicest car, but it feels pretty darn good not to be making payments on it. 


    Once the debt is gone, go all-in on saving

    When you get to this point, you’ve done the following:

    • Build an emergency fund
    • Put enough into your 401(k) to get your employer match
    • Paid off all of your debt (YAY!)

    For many people, it’s probably tempting to spend that extra money. It’s like getting a huge raise, right? And while I totally agree that becoming debt-free means you can start using some of that money on wants instead of needs. 

    But this is also the time to up your savings game in a big way. 

    First, this means building a hefty job-loss fund for yourself. Aim for six months of expenses in case you and/or your spouse lose your jobs. 

    Now that you have more disposable income, you can also start putting more into your retirement account. The younger you start saving for retirement, the more you can take advantage of that compound interest! 


    Final Thoughts

    I know so many people stress out about whether they should be saving first or paying off debt. I struggled with this dilemma for years. 

    The good news is that you can do BOTH.

    It is possible to save a solid emergency fund to help you out in a tough situation, while also slaying your debt.