3 Proven Ways To Pay Off Debt Faster in 2023

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Written by Agatha

January 28, 2021

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At the time of his graduation, which was mid-2016, my friend owed $3,000 in student loan debt. 

4.5 years later, he owes $4,800 and counting! 

Since he graduated in 2016, he hasn’t been able to pay any amount towards this loan for various reasons. There’s the fact that within the 4.5 years, he’s never had a ‘high-paying’ job that would translate to having extra money to put towards the debt and there’s the lack of financial literacy. Had he known about the hefty monthly penalties charged for non-payment, he would have reorganized his finances to allow him to make monthly minimum payments.

Within the 4.5 years, he also got stuck in the bloodsucking, unregulated mobile money loans.

Since I started blogging about money, I also deliberately make time to talk with my friends about money. When this year began, the same friend told me that one of his financial goals this year is to get out of debt. 

He had already taken the first step which is to figure out his starting point by calculating his net worth. That’s how he knew that he was $4,800 in student loan debt. 

His student loan accrues 4% interest rate per annum. The Higher Education Loans Board (HELB) also charges a $60 penalty for every month one defaults. There’s also an additional $10 annual ledger fee. 

People often talk about the magic of compounding when referring to investments, but my friend’s story is evidence that debt also compounds! And it’s time for him and you, to attain financial freedom by getting out of it!


Debt payoff planner and debt payment calculator


Click here to download an easy to use debt payoff planner and debt payment calculator.

get out of debt

“Debt isn’t a Math problem, it’s a behaviour problem.” Dave Ramsey

Ways to pay off debt


There are several debt payoff plans or debt pay off strategies. In this article, we’ll cover 3:

  • The Urgency Method by The Wealth Tribe
  • The Snowball Method by Dave Ramsey
  • The Avalanche Method



1. The Urgency Method.


In my debt story, I shared that I’d walk around with stiff shoulders, clenched jaws, shame and would sometimes I’d switch off my phone to avoid phone calls from debt collectors. 

Debt severely affects your emotional well-being. People who are deep in debt often suffer from low self-esteem, anxiety, sleeplessness, stress, depression and even impaired cognitive functioning.

Owing your friends, family, colleagues, neighbours and other people money damages your reputation if you don’t pay back on time or don’t pay back at all. We fear what these people are saying behind our backs, and we sometimes create wild scenarios in our minds of what could happen if we don’t pay. 

Having debt collection agencies calling you or sending you threatening messages while at work or while hanging out with your friends is embarrassing. Some even call your boss to report that you haven’t honoured your debts. 

Shame and stress is a common characteristic among the people I help to get out of debt, which is why I came up with the urgency method. 

“If you don’t take good care of your credit, then your credit won’t take good care of you.”― Tyler Gregory

How the urgency method works


When people come to me for financial help on how to get out of debt, my first step is always to get them to reduce their level of anxiety.

This method involves making a list of all institutions and people you owe, then assigning each debt an urgency tag. The urgency tags could be;

  • Very urgent
  • Urgent
  • Semi-urgent
  • Not urgent
  • To clear immediately
  • Blacklisted
  • To pay in X days/weeks/month/years

pay off debt

The Urgency Method

After assigning the tags, it then becomes obvious which debt you should tackle first.

If you’re receiving life-threatening calls or messages from collection agencies, that is a life struggle you want to get rid of. If one of the people you owe is out there tarnishing your name to a point where you’re unable to visit certain places, that’s something that needs immediate attention.


Why the urgency method works


Making a list of all your debts on a spreadsheet is liberating.

After completing this task, one of my clients said It felt like the heaviest weight of my life had been taken off my shoulder. I had removed my financial burden from my mind and transferred it to my financial responsibilities excel sheet.’

With less anxiety, such people are usually in a position to understand the excel sheets, get the logic behind personal finance knowledge and talk openly about money. A barrier is removed and the pride of clearing the first life-threatening debts fuels them to do better and eventually attain financial freedom.

They say that “a good reputation is more valuable than money.”  It’s also an honourable thing to pay off debt and live below your means.

Clearing debts owed to friends, family and colleagues also helps you maintain healthy relationships which are useful in your financial freedom journey and life in general. 

The emotional bliss that comes with this method is what makes it one of the best ways to get out of debt. It gives you mental freedom!


2. The Debt Snowball Method


I learnt this method from reading Dave Ramsey’s book. It’s a simple 4-step process.

  • Step 1: Make a list of ALL your debts from the smallest to the largest except your mortgage. Ignore the interest rate.


  • Step 2: Pay the minimum amount due on each debt except the smallest.


  • Step 3: Pay your smallest debt in full. If it’s a big debt and you’re unable to pay it in full, pay as much as you can.


  • Step 4: Repeat the process until you’ve paid all your debts.


The amount you were paying on the previous smallest debt should be rolled over to the new smallest debt. 

Note: A minimum payment is the smallest amount out of what you owe that the financial institution requires you pay each month.


Why the debt snowball method works


This method works because you’re literally creating hope with each debt that you pay.

People who are deep in debt and also financially illiterate don’t understand the logic behind the Math of debt. Hope is what will get you out of debt, one payment at a time. 

If you do the opposite and start with the largest debt, you’ll get frustrated. You’ll give up, and you’ll start entertaining negative money emotions such as ‘it’s it’s okay to be in debt because everybody else is.’


Why pay small debts first?


When asked why use the snowball method, Dave Ramsey said “just like a snowball rolling downhill, paying off debt is all about momentum. With every debt you pay off, you gain speed until you’re an unstoppable debt-crushing force.”


3. The Avalance Method


This debt payment method is also known as debt stacking.

If you’re a lover of cold-hard numbers on spreadsheets and do not rely on motivation to crash your financial goals, then this is the method for you!

Remember that we ignored interest rates with the snowball method? With Avalanche, the interest rate is what determines which debt to pay first.


  • Step 1: List ALL your debts from the highest interest rate to the lowest. Ignore the amount/size of the debt.


  • Step 2: Pay the minimum amount due on all your debts except the one with the highest interest rate.


  • Step 3: Pay the full amount of the debt with the highest interest rate. If you’re unable to pay the full amount, pay the highest amount possible.


  • Step 4: Repeat until you’ve paid all your debts.


Why the avalanche method works


You will pay less interest to the financial institutions which makes this method financially efficient. This is a great motivational factor as that money could be directed towards your emergency fund, investments or just pure fun such as travelling. 


Why the avalanche method doesn’t work


As Dave Ramsey says “personal finance is 80% behaviour and 20% knowledge.” If you’re deep in debt, you need the small wins to keep going.  

With this method, you might not see results in a long time if you have big debts. And, if you did understand the Math of debt from the word go, you probably wouldn’t be in debt…which is why it’s safer to go with the urgency method and debt snowball method so that you can stick with it till the very end!

“People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom.” -Naval Ravikant

Which debt should you pay off first? 


I believe the 3 debt pay off methods listed above have given you the clarity, based on your circumstances, to decide which debt to pay off first. You have to consider the loan terms, interest rate, payment period and your spending habits.

To become debt-free, you NEED a debt pay off plan that works for you and you need to stick with it.


Should I pay off debt or save and invest?  Or why pay off debt before investing? 


This is a valid dilemma that people often have. Should you start eliminating your debt or should you invest when you have extra money? That will depend on your income, budget and goals. 

In most circumstances, you should be able to do both simultaneously as soon as you eliminate debts that keep you awake at night.  Doing this successfully would mean creating a budget that works for you and sticking to it. 

You should still stick to paying yourself first even when paying debt, which is what I did when I had multiple debts and still do now. I have one student loan debt that I plan to clear before the end of this year.

Update: I attained debt freedom on Thursday, 8th April 2021 at 1505 hours! 

If for example, you have high-interest debt such as credit card debt or mobile money loans, then choose to invest your extra money while making only minimum payments towards your debt or ignoring the debts, in the long run, you will end up paying too much interest. This would be a killer to your credit score which would also prevent you from buying a home or accessing other credit facilities in future.

If you don’t save and invest, then you’ll be jeopardizing your financial goals and losing out on the magic of compounding.

Here are other factors to consider while making this decision.


Will paying off debt improve your credit score?


YES.  You should pay your debts on time.

A credit score is a number used by financial institutions to decide whether you qualify for a loan (credit). It’s a number that ranges from 300 to 850 (for some countries it’s between 200 and 1000). The higher your score, the higher your likelihood of getting your loan approved. 

Kinda sucks that we still have to worry about scores years after we leave school, right?

If you want to learn more about improving your credit score, this is a great article. 


Final Thoughts


Coming to terms with all the debt you’re carrying can be a daunting experience. But you need to step out of financial avoidance and rip the band-aid because unfortunately, there’s no silver bullet to debt payment. 

To attain financial freedom, you have to make short-term sacrifices. Focus on the fact that you have the power to get out of debt. Use the energy previously reserved for anxiety for positivity and celebrating your small wins. 

Debt payoff planner and debt payment calculator

Click here to download an easy to use debt payoff planner and debt payment calculator  and you’ll be on your way to debt freedom!


Share with your tribe!

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  1. Kimaru

    Wo, this is super informative!!!! When I was doing my video on “Things they don’t tell you about the HELD Loan and why you need to start paying” I had not even read this, how I wish I had! That said, everyone should read this as it provides insights into getting out of debt.

    • Agatha

      Haha, you still have many more videos to come! Now that you know better, your next video will be epic! Thanks for always reading 😉


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