I spent the last 7 years of my life in debt. I have finally paid off the last debt payment, and I’ve never been happier. Honestly, I can’t even describe the feeling. In this post, I want to give you my top tips on how to pay down debt fast, by telling you what I did to pay off £25k in less than a year.
If you prefer to watch a video, I’ve also embedded my Youtube vid on this down below. As always, please let me know if you have any questions!
I started off with just a £7k loan, when I was 21. It then spiralled… and spiralled… and spiralled, until I found myself in such a mountain of debt I couldn’t believe it. And it was never a bad thing because I could “afford” the monthly repayments. But what I didn’t realise was that I could be using that money and making it work for me.
Anyway, without further ado here are my top tips and ways I have paid down £25k of debt. Firstly, let’s look at decreasing spending.
Reduce interest on your debts.
Once I’d been paying off my debt for a while, my credit rating naturally went up. This means I was able to get a better rate on loans. I used this to my advantage by re-financing my existing loans, and managed to get one of my loans down from 17% to 7%! Huge saving.
Within this method, I also transferred my credit card balances to 0% credit cards and subsequently moved money around these cards when the terms would come to an end (always pay off the minimum at least, of course!). Another great tip, is to find 0% transfer fee cards – these are a little more difficult to find especially if your credit rating is low, but as you grow your credit card rating and pay off debt, you will be able to move onto these cards.
Stop buying certain things.
I have a whole video on things I stopped buying to get out of debt, but essentially what I mean is that I decided to cut certain things out completely or just reduced them.
For example, coffee – this is a big one for a lot of people! I would buy at least one coffee a day from Starbucks or equivalent stores. £3 a day x 5 days a week x 52 weeks a year = £780 in one year! Scary.. I have a coffee machine at home ( I get a lot of comments asking – it’s the Delonghi cappuccino machine), and it’s brilliant. I make coffee for myself every day – just how I like it, and I save lots!
Decrease going out.
Living in London, it’s so easy to spend £50 on one night out. Arghhh! Ridiculous. Also, working in an office environment, it is really easy to get into the “let’s pop for a quick drink” culture. I’ve made a conscious effort to decrease this, and it has massively helped my finances! Don’t get me wrong, I still go out – but I am more mindful of when, with who, and how much I spend!
Do Food Inventory & Meal Planning.
This may sound crazy, but it has helped me SO much. I will make a post soon telling you more about this, but essentially I have a spreadsheet to keep track of everything I have in my cupboards, fridge and freezer. It means I stop letting food get out of date, and therefore save money in the long term.
Meal planning also means I can strategically use my ingredients to avoid food waste, as well as discourage me from last minute fast food decisions because “I have nothing to eat”.
Now, let’s look at increasing income….
Apply for a promotion at work.
Whether this means at your current job, or applying for a new role at a higher level – what do you have to lose? I have managed to get promoted fast many times over the last 8 years, and it’s because I dared to apply! There are plenty of people I used to work with who are still stuck on the same levels. Yes, some of them are happy where they are but I know for a fact some of them want the promotions – they are just scared to apply! I applied for one I didn’t think I could get recently, and managed to get it – this massively helped in paying down the debt.
Get zero hours part time work.
This was one of the best decisions I have ever made. Not only do I have additional income, I am having SO much fun! I absolutely love my two part time jobs. I work in a bar and in a restaurant and because I don’t HAVE to do these, I actually enjoy them lots. I can socialise with new people and do lots of cool stuff (that I can’t talk about here!).
Zero hours jobs which don’t require a minimum hourly commitment are great for people who have full-time work or other commitments – it means you can choose when you work. You could, in theory, do this via the gig economy too – things like uber driving etc.
I have a job which is mentally draining, so doing some physical work part-time is actually great for my health and mental wellbeing – it doesn’t make me exhausted the way people expect it would.
Do Pet sitting.
Yes, this is one you would have seen in many side hustle articles and videos. But it’s just SO easy. I absolutely love animals, so this is really effortless for me. I recently did some cat sitting for a cat in the building next door and got £110 for one week! I had a nice furry companion and made money – score!
I would advise signing up to more than one website, and only accepting bookings from people nearby. I’ve had to travel in the past to do this, and it takes a lot of the enjoyment out of it and suddenly becomes less profitable… if you live in a densely populated area, this can be a gold mine!
Sell your stuff.
Again, perhaps an obvious one. But it is a classic – unless you are a hardcore minimalist, I can bet there are things in your flat that you don’t use and that you could sell! I recently sold a GoPro camera that I didn’t use, and got £100. But even things like clothes, old furniture, books etc can give you a little bit of extra income – remember, with debt – every little helps!
Use Money-Making apps .
There are so many money making apps. I’m going to put these into another post so I can go into these in more detail – but for now, you can watch this apps that make you money video.
Use your credit card benefits.
Yes, you heard me correctly. Using credit cards to get out of debt is actually one of the best ways to get out of debt. As long as you are smart, you can make this work for you. I’ve linked the post there, but the main way this works is using points to get money off or cash back on purchases you were already going to make. If you are disciplined, this can be a great little income booster!