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What is the Best Way to Pay Off Debt

This subject may seem a little off topic for this website but like many, we too had a debt to deal with over the years.

The reason we are bringing it up today is that many of our readers actually questioned us about what is the best way to pay off debt.

The best way to pay of debt

Wanting to know how to pay off debt fast practically always comes up during our online discussions. They have signed up to various online business schemes over the years only to get deeper in debt.

I tell them how we wanted to get out of debt by saving on our expenses is one of the main reasons we wanted to work from home.

So we wanted to share our experiences and the journey we took to get out of debt. We are not experts when it comes to financial advice but I think our experiences may help others.

You will learn how we got in debt, how we took control of our debt, how we paid it off and how we plan to stay out of debt.  

How We Get In Debt

Now I'm not going to share and bore you with all of our financial details with spreadsheets and such but I will describe events and habits that got us into debt.

Obviously, everyone will have different reasons for getting into debt but it all really comes down to one simple rule on how people get into debt.

Of course, that is that we spend more than we make.

Yes...I know...duh Paul, I don't need you to describe the obvious.

Actually, I do, as I feel people in debt go through similar steps of denial and acceptance as gamblers or alcoholics do.

I believe that many people in debt, like ourselves, go through a denial stage. We keep buying even though we know we haven't paid off the things we bought the month before and yet we still make the same amount of money per month. Then we buy more the following month and so on, and so on.

We turn a blind eye to the amount of interest we pay per month and convince ourselves we deserve these things by thinking, we only live once, life is short so enjoy it now while we can.

This type of process will last a different amount of time for everyone but we all have a breaking point.

That breaking point may be a time when you realize on your own that you need to act or it may be a time that a financial institution tells you need to act now or else!

We were fortunate enough to come to the realization on our own that we were getting into financial trouble, we knew we had to act now or else. 

It was a difficult decision to admit to ourselves that we need to take action. The habits of spending were engraved deep in our daily routine but we had no choice but to take control of our debt there and then.

Take Control of Your Debt

So how does one take control of their debt? I mean, I think we are all experts on how to get into debt but how to take control.

Well, the same rule needs to be said, you need to spend less money than you make.

Now, this is where it gets tricky, where you need to sit down and go over your budget.

Sounds easy right. You sit down to write down the amount of money that you make every month and then subtract how much you spend.

If you are in debt you will expect to see that you spend more than you make...right?

Well, the weird thing is that we were not spending more than we make...what?

Well...I should say we lied to ourselves with the numbers we put down to convince ourselves that we were not as negligent in our financial responsibilities.

That step took a few retakes to get to the point where we're finally honest with ourselves about our spending.

Oh, ya...there it was we were spending way more than we were making.

Now we were ready to do what it takes to learn how to pay off debt fast!

How to Pay Off Debt Quickly

Now we were ready to become debt free. Although it was a harsh reality we were relieved to know we were now being honest with ourselves and we were ready to do what it takes to get out of this debt.

So we started by cutting out all non-essentials.

The first biggest costs were related to food, that is where we were wasting way too much food and eating out too often.

We started by making grocery lists based on daily menus. That way we were able to keep better track of what we needed to buy, how much it would cost and with much less waste.

We decided to cut eating out in restaurants for 2 months then limit it to a strict monthly budget.

Other things we cut out included any non-essential monthly subscriptions like cable, magazines, and mobile phones (this was before the internet and cell phones were commonplace).

We traded in our van and bought a small economy car even though we were starting a new family. We realized we can still get from point A to point B with a small car just as well as a nice big van...maybe not as comfortable.

We still had to pay towards this car but the monthly payment was about half and it was much cheaper on gas and insurance.

Now that we cut out non-essential monthly services and fees we now needed to deal with all the interest we were paying on credit cards and line of credit.

This is where we needed to visit our financial institutions to discuss options and changes in rates.

We opted to remortgage our home. We had to pay a penalty to remortgage as it was not at term but we calculated that the cost of the penalty was much less than the amount of interest we would have to pay if tried to pay off our credit card debts month by month.

Remortgaging was also the fastest way to paying off our credit card debt while paying a much lower interest rate as it was within our mortgage.

The only downfall is that it will now take us much longer to pay off our house. At least our house was increasing in value so this decision was easier to swallow.

Now that we got rid of all our credit card, line of credit and car payment debt we could sleep so much better.

It was such a relief being free of debt. We never wanted to be in that situation again so we needed to take action there and then to not get into bad habits again.

We needed to come up with a plan to stay out of debt.

Staying Out of Debt

The first thing we did was decrease our credit card limits, cut way, way room for compulsive shopping.

We didn't cut up our credit cards. We knew that they were important to have a strong credit ranking for when it comes to getting the best interest rates when it came time to remortgage at term.

We realized our biggest cost savings came from controlling our spending on food and vehicles.

If we can continue to budget our food purchases and avoid buying a new car when spring rolls around we can manage to keep our finances in check.

Another way we stay out of debt is that we continue to find ways to earn extra money on the side of our regular career jobs.

We have managed small businesses on the side, some very successful with businesses such as retail merchandising, some not so successful as trying out MLMs, and some others are a work in progress with a slower but continuous growth like affiliate marketing.

It has been over 18 years ago since we got out of debt and now we are in a completely opposite situation where we are saving and investing extra money, and that invested money is earning more money.


Getting in debt is nothing to be ashamed of. So many people, if not all will be in debt at some point in their lifetime.

One should only be ashamed if they don't accept or take responsibility for their debt.

If you are in debt it is important to understand how you got into debt.

Only then you can take control of your debt, figure out how to get out of your debt situation and then know how not to get back in debt again.

We were fortunate that we had a home in our name where we had room to remortgage on our home equity. This may not be your situation and may need to look at other options such as getting a consolidation loan.

I've provided some other resources below that may be helpful and more relevant to your situation.

About the Author Paul

My online journey started in 2008 when I was tired of working for somebody else. I searched the internet for years trying to find out how to make a living from home with an online business. In 2015 I finally found the information and support from a website just like this one.

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