I Got 99 Problems, But Debt Ain’t One! (5 Steps to Overcome Debt)

Back in 2016, I realized I had quite a few problems when it came to money and my debt issues:

  1. My upcoming wedding was going to cost $15,000
  2. The truck I had bought in 2014 was the worst financial decision I had ever made.
  3. Close to $300,000 in student loans was crippling.
  4. My savings were enough to get my soon to be wife and me through one month in case of an emergency (That's it).
  5. My metabolism wasn't what it was when I was 22

Now, all that being said, who doesn't have a few problems going on in their life, especially with regards to money?

Let's be honest, we all have problems, probably more than 99 too, but like Jay-Z said, “Debt doesn't have to be one!”

Yes, he didn't say debt, but for every problem, I truly believe there is at least one solution for said problem. For example, a $15,000 wedding was expensive, but cutting the guest list actually saved a few grand.

Additionally, my metabolism wasn't as good at 28 as it was at 22, but better conscious decisions with eating and more cardio helped keep my body in shape.

But the $300,000 worth of student loans… well that was a problem. A big one. And the question we were left asking was, how do we overcome our debt?

how to overcome debt and be like jay-z
Overcome your debt and live like Jay-Z!

How to overcome debt 101:

Sure, debt can certainly be crippling, but it is a problem that can be fixed with some simple adjustments.

Now don't confuse simple with easy. It isn't too complicated to get out of debt, you simply:

  1. Spend less than you make
  2. Use the extra net income each month to pay off debt (See 25 tips here)
  3. Then wash, rinse, and repeat.

However, there are plenty of variables that can make getting out of debt more challenging for some. Perhaps you don't make enough money to really make a dent in your debt so it seems pointless.

Or possibly you're in a similar boat as us, and you have six figures worth of debt from some past decisions. Either way, you can actually overcome your debt issues and believe it or not, it won't be the amount of debt you have that makes it hard to overcome your debt, it will be something else…

Debt and societal pressures

Unfortunately, it is commonplace in today's current society to just accept debt.

Looking at the chart below, according to the Federal Reserve, the average household debt in the United States in 2016 was:

debt stats 2016

While these figures have since increased (Student loans are now $1.6 trillion), the first important step in overcoming debt woes is realizing it is a problem… hence the whole 99 problems but debt ain't one theme!

Instead of growing their wealth, most adults will continue to incur more debt for most of their adult lives.

In an article that featured several six and seven-figure earning financial experts, the recurring theme amongst many was to make sure you avoid debt and accumulate wealth in your adult years.

However, the standard for most Americans is the opposite:

They incur debt and don't invest. And not only can this contribute to financial stress, but in many cases, it is the hardest thing to get over when paying off debt.

Overcoming the societal pressures that promotes the live now and pay later lifestyle (Instead of focusing on becoming debt free), might be the hardest thing you will have to overcome with regards to your debt.

So here are 5 simple steps to help you overcome your debt in no time!

Related: Five Ways to Stop Making Money Complicated

5 Quick Steps to Overcome Debt

Overcoming your debt can take months or years depending on your present situation. Factors such as income, cost of living, emergencies, and family dynamics can impact the amount of time it takes to overcome debt issues.

However, by following some of these simple steps, it isn't hard to get the “Ball Rolling,” so to speak and start chucking away at your debt.


5. Stop adding to your debt.

Imagine trying to put out a fire while simultaneously adding gas and wood to the fire… seems silly right?

Well, try to imagine paying off debt when you're busy adding to it by financing new cars, using your credit cards or going back to school with loans – just as silly.

Be sure to avoid taking more debt and adding to the burning fire, here are some ideas to help:

  • Cut up existing credit cards
  • Pay low balance debts off with savings then close accounts
  • Avoid “Interest-free promotions”
  • Unsubscribe from retail e-mails that promote spending
  • Immediately toss all junk mail credit card offers
  • Stay away from car lots (Read why you should never by brand new cars here)
  • Do not use reverse mortgages or personal loans for remodels, vacations, etc.
  • Avoid financing things that are wants instead of needs.

Once you become a good steward with your money and you stop avoiding new debts, it is then time to start getting rid of your old debt. But, in order to overcome your debt you will first want to do the following:

  1. Figure out how much debt you have.
  2. List out all of your debts individually (Use the one below)
  3. Figure out your net monthly income
how to overcome debt

Once you have your debts listed out individually and you know how much you make, you can then pick a strategy to help you pay off your debt!


4. Use the Debt Avalanche or Debt Snowball

There are a few different ways to pay off debt, and it really depends on personal preference, but they all involve one common theme:

Making extra payments.

However, there is a right way and wrong way behind how you go about making those extra payments and the strategies typically involve some form of weather.

Most financial and debt experts recommend using some form of the;

  1. Debt snowball
  2. Debt Avalanche
  3. Cash Windfall

Here is how each works in a nutshell!!


Debt Snowball

  1. Use the photo above to list out all your debts, starting with the least amount owed.
  2. Continue to pay only the minimum on all other debts.
  3. Take all available extra income and make extra payments towards the smallest balance.
  4. Repeat this monthly until you pay off a debt item.
  5. Take newly freed up minimum and extra payment money and roll into the next debt item.
  6. Wash, rinse, repeat until debt is gone. See photo below:
debt snowball

See how this fictional couple can pay $60,000 with the debt snowball and $600 in 3 years!


Debt Avalanche

Similar to the debt snowball, the debt avalanche uses the same principles, but instead of focusing on the smallest amount owed, the debt avalanche starts by attacking debt with the highest interest rates!

Here is how the debt avalanche works;

  1. Line up debts from highest interest rate to least (Regardless of balance)
  2. Make extra payments towards the highest interest rate loan
  3. Pay off a loan, then take all freed up money to pay the next, and so on, just making sure to always attack the loan with the highest interest rate!
debt avalanche

The idea behind the debt avalanche is that you're able to save more in the long run because you're attacking the interest heavy debt first!


Cash Windfall

A cash windfall is when someone receives a lump sum of cash from a large tax refund, inheritance, gift, investment deal or something else. Instead of using the cash windfall to invest or spend, you can use it to pay off debt.

While a cash windfall might not be something you can rely on, in the event you come across even just a few $1,000, it isn't hard to overcome some debt problems by paying your debt with a cash windfall!

Using a cash windfall to pay off debt helps save on interest charges in the long run!! This leads to the next point, use extra money to attack debt!


3. Figure out how to earn extra money.

Now that you have started to pay off your debt and you have gotten used to making extra payments, it might be a good time to start figuring out how to earn some extra money.

Whether you can work overtime, take on side hustles, or you sell things to make extra money – the quickest way to get out of debt fast is to make more money.

Debt freedom really boils down to making extra payments! Figuring out ways to make an extra $50 a week can have a huge impact on your pursuit to overcome your debt.

Look at it this way: $50 per week X 52 weeks = $2,600 extra per year.

Over the course of five years of making an extra $50 per week can result in $13,000. That is enough money to knock out a few credit cards or car payments!

So how can you make some quick money? Here are some ideas:


2. Consider refinancing “Bad debt” and loans.

The 12% interest rate on your auto loan or the 8% interest rate on your student loans might be making your race to overcome your debt more challenging.

One of the “Quick Fixes” to debt is to simply refinance your debt.

Reach out to a company like LendKey or Penfed and see about what rates are available for refinancing debt such as:

  1. Student loans
  2. Credit cards
  3. Cars

Locking in a new rate typically means new terms, but if you're planning on making extra payments and beating the loan term lengths, saving a few dollars each month can help you free up money to attack specific loans!


On another note, be careful when consolidating your debt. Sometimes this can be worse in the long run.

Consolidating debt may reduce your monthly payments, but combining multiple loans into one and extending the loan terms means you will pay more in interest over the long haul!

Related: Questions to Ask Yourself Before Refinancing


1. Stop Comparing Yourself

Consider the following stats when it comes to debt and finances for American Adults;

Per Forbes, 8 in 10 adults are currently living paycheck to paycheck. Additionally, the average American adult is saving less than 3% of their income per year.

There is no easy solution to figuring out financial woes, but one way to secure YOUR finances is to make sure your debt free. Becoming debt free and freeing up all the money that goes towards debt payments each month allows the average adult to:

  1. Save more
  2. Travel more
  3. Have less financial stress

But in order to make all three from the list above happen, it first starts with ending the comparison game.

Comparing yourself financially is a recipe for financial ruin. The most important step in overcoming your debt is ending the comparison game!

Some simple steps to end financial comparison include:

  1. Know WHY you want to be debt free
  2. Don't hang out with people who want you to spend money all the time
  3. Think long term, instead of short term
  4. Learn to say no!
  5. Get healthier (This increases your confidence and ability to say no)
  6. Remember, opinions don't pay your bills!

See Also; How to Stop Comparing Yourself to Others



Final Words on Overcoming Debt!

Debt is not just part of life.

In regards to debt, the quicker you can adopt the mindset that debt is a problem you can kick in a matter of years, you will live a happier lifestyle.

All the common financial statistics that frighten the heck out of most can be reversed with a few minor tweaks and using the five steps listed above!

That doesn't mean it will always be easy or there won't be times when you feel like giving up, but stay steady! Anything worth having always comes with a little struggle.

In parting, here are some final thoughts to help you finally answer your question, “How do I overcome my debt?”

  1. Start by recognizing that your debt is a problem until it's gone, then it isn't!
  2. Find ways to make extra payments, just always make sure they're targeted
  3. Imagine would it would be like being debt free and set a goal to have that feeling in a matter of years!

At that point, you can be like Jay-Z on a jetski. You may have 99 problems, but at least debt won't be one!

Just think, how awesome would a debt free, young and wealthy generation be if more young adults started taking their personal debt problems more seriously?

Q: What has held you back from overcoming your debt in the past?