Best Strategies for Paying Off Debt Faster: How to Save Money

Reviewer: Adam Olson, CFP®, LUTCF, FSCP, RICP
Wealth and Retirement Strategist

Estimated Read Time: ~8 minutes

Summary: Living with debt can be stressful, but with smart planning, you can pay it off faster and save money on interest. In this article, discover helpful tips to reduce debt and cut costs.

In this article:

• Make sure you have a clear picture of what you owe
• Choose the right repayment method for you
• Simplify things with debt consolidation
• Switch to biweekly payments
• Use extra income wisely
• Cut recurring expenses and redirect the savings
• Sell unused assets to accelerate progress
• Automate your payments?
• Negotiate better terms
• Avoid new debt while paying off old balances
• Use small psychological tricks to stay consistent
• Build an emergency fund
• Keep revisiting your plan
• Your next steps

Debt can feel suffocating, but you have more control than you realize. If you’re serious about learning how to get out of debt fast, it comes down to picking the right approach and sticking with it.

Some people swear by the snowball method, others go all-in on avalanche; what matters is finding what clicks for you. Tackling debt is huge, but don’t forget about protecting your financial future once you’re in the clear. But, before any strategy works, people need to accept a hard truth: there are only two ways out of debt—make more money or spend less money. Everything else is a variation of those two levers. If neither changes, the debt won’t either. With that in mind, let’s break down a few simple strategies.

1. Make sure you have a clear picture of what you owe

Before pursuing financial independence, it’s vital to get a complete picture of your finances. Underestimating what you owe or overlooking smaller accounts can derail your progress.

Make a list that includes:

• Each lender and the total balances.
• Interest rates and minimum payments.
• Payment due dates.

Extra tip: Use a free budgeting tool or even a simple spreadsheet to track every payment. These budgeting tips can help you manage costs and stay on track, keeping your motivation strong as you see your progress.

2. Choose the right repayment method for you

Two popular strategies for paying off debt that can keep you on track are the avalanche and snowball methods.

The avalanche method prioritizes debts with the highest interest rates first, which usually saves the most money over time. Continue making minimum payments on all your debts, but direct any extra funds toward the balance with the highest interest rate. Once that debt is paid off, apply the freed-up amount to the next highest-interest debt, and repeat the process until all debts are eliminated.

With the snowball method, you start by paying off the smallest balance first while making minimum payments on all other debts. Once that balance is cleared, roll the amount you were paying into the next smallest balance, and continue this process until all debts are paid off. Paying off a small debt completely can give you a mental boost and build momentum.

You can also combine the two methods to balance motivation and savings. For example, tackle one or two small debts first for quick wins, then switch to the avalanche approach for the remaining high-interest balances.

This approach lets you make progress while minimizing interest, helping you regain your financial freedom faster.

3. Simplify things with debt consolidation

If you have multiple debts, such as credit cards and personal loans, debt consolidation may help you pay off credit card debt faster. Look for a consolidation loan or balance transfer credit card with a zero or lower interest rate to save money and simplify your repayments.

Extra tip: Compare the total cost before you commit. Look at fees, loan terms and interest. The goal is to save money and pay off what you owe quicker, not just make debt look tidier.

4. Switch to biweekly payments

Making half-payments every two weeks instead of one full payment a month adds up faster than you might think. You’ll end up making 26 half-payments each year, which equals 13 full payments instead of 12.

It might only be one extra payment, but it helps to reduce your balance more quickly and could save you money, especially since credit card interest is often calculated daily on your balance.¹

5. Use extra income wisely

Unexpected money is a great help in paying off debt faster. Tax refunds, bonuses or side-gig earnings offer a chance to get ahead, particularly if you have a plan in place before the money arrives.

Extra tip: Feeling restricted can lead to resentment, making it harder for some people to stick with their debt management strategies. In such cases, you could try putting 80% of any extra income toward your highest-interest debt, and the remaining 20% into savings to enjoy later.

6. Cut recurring expenses and redirect the savings

Adam Olson, a certified financial planner with Mutual of Omaha, said: “Debt payoff requires a lifestyle shift. If your current habits created the debt, keeping those habits while hoping for a different result doesn’t work. This phase isn’t about comfort, it’s about correction.”

Cutting costs is one of the best strategies for paying off debt, but it doesn’t mean you can’t still enjoy life. But the truth is, if you’re in debt, convenience spending has to stop. Subscriptions, takeout, daily coffee—these aren’t necessities. They’re choices, and right now, those choices are slowing your progress. The good news is that most people have some things they can cut back on without even noticing.

For example:

• Subscriptions and memberships you rarely use.
• Insurance rates that haven’t been reviewed in years.
• Utility and phone bills where loyalty discounts might apply.
• Takeout meals that add up over time.

Even saving just $100 a month and putting it toward debt adds up to an extra $1,200 a year.

Extra tip:  Whenever you cut a regular expense, set up an automatic transfer of the savings to one of your debts to ensure it doesn’t get lost in daily spending.

7. Sell unused assets to accelerate progress

Paying off debt faster often requires more than trimming monthly expenses; it may mean selling things you no longer need. Extra vehicles, recreational equipment, or unused items sitting in the garage can often be converted into immediate progress. Olson adds, “Selling unused assets isn’t a step backward; it’s a strategic reset that helps you regain control.”

8. Automate your payments

Automation keeps debt repayments consistent, which is often half the battle. Avoiding missed payments helps you steer clear of late fees, improve your credit score and stay disciplined in your debt repayment.

Setting up automatic payments for at least the minimum due on every account is a good start. Once you’re able, you can begin increasing those payments, even one at a time.

9. Negotiate better terms

You might be surprised at how effective a polite call to your credit card company or lender can be. If you’ve made regular on-time payments, ask whether you qualify for a lower interest rate or a hardship program.

Even a small rate drop can help you save money. For example, cutting the rate from 20% to 17% on a $5,000 balance saves about $150 in interest per year.

If you’d rather not negotiate alone, a credit counseling agency can talk to creditors on your behalf.² Many nonprofit organizations offer this service at little or no cost.

10. Avoid new debt while paying off old balances

Trying to pay down debt while still using credit cards works against your progress. Each new charge adds interest that cancels out your hard work.

A few simple habits can help:

• Temporarily stop using cards for non-essentials.
• Use cash or debit for everyday spending.
• Keep one card active for emergencies, but pay it in full each month.

This shift helps you rely less on borrowed money and avoid common money traps that hold you back, allowing you to focus on building financial stability.

In addition to avoiding new debt, Olson adds, “One of the most damaging habits for people in debt is relying on 0% financing or “buy now, pay later” programs. These offers often create a false sense of affordability and lead to overspending. If you can’t pay cash for non-essential purchases, you can’t afford them.”

11. Use small psychological tricks to stay consistent

Debt repayment takes discipline. A few mental tricks can help with motivation so you stay on track:

• Rename your online banking accounts to reflect your goals, such as “Freedom Fund” or “Goodbye Visa,” to keep you motivated.
• Set mini milestones, like paying off every $100, $500 or $1,000, to track your progress and stay motivated.
• Reward yourself with something small but meaningful after each milestone.

Extra tip: You might find certain times of the year harder than others; many people struggle to stick to a budget during the holidays. However, planning ahead and focusing on how far you’ve already come can help.

12. Build an emergency fund

Paying off debt quickly is great, but if you’re in a position where a single emergency could force you into taking out more debt, you’ll struggle.

Just 46% of Americans have enough emergency savings to cover three months of expenses.³ Building a small buffer fund matters even while you’re in repayment mode.

While three to six months of expenses is ideal, start with what you can. Then, once your debt is under control, you can boost your emergency fund.

Extra tip: Automate transfers to your emergency fund, even if it’s just a small amount per paycheck. Over time, these small contributions add up and help protect your financial progress.

13. Keep revisiting your plan

Paying off debt isn’t a one-time project. Income fluctuates and interest rates change, and sometimes life throws unexpected curveballs. That’s why it’s important to regularly review your plan to make sure you’re still following the best strategy to pay off debt.

Ask yourself:

• Are my balances decreasing as expected?
• Can I increase my payments?
• Do I need to adjust which debt I’m targeting first?

Reviewing your progress keeps your plan realistic and flexible. It also gives you the chance to celebrate how far you’ve come.

Your next steps

Paying off debt faster doesn’t have to mean giving up everything you enjoy. It’s about making smart choices that ensure more of your money works for you, rather than for your lenders.

Olson adds, “It also does require clear priorities. When you’re serious about eliminating debt, enjoyment may look different for a season. Discipline now creates freedom later. The formula is simple: make more money, spend less money, and change the lifestyle that created the debt. Without all three, progress is temporary.”

Consolidating, automating, negotiating or trimming spending could all be effective debt management strategies. When used effectively, they can make a big difference, from clearing credit card balances to paying off loans faster.

Over time, steady effort builds momentum, and before long, you’ll see the balance start to shift in your favor. If you’re not sure how to get started, meeting with a financial professional can help.

At Mutual of Omaha, we’re committed to providing personalized support and strategies to help you pay off debt and master your finances.

Looking for help navigating your financial future?

Speak with us today

Frequently asked questions (FAQs)

What is the 50/20/30 rule for budgeting?

The 50/20/30 rule is a budgeting method that helps you manage your debt and spending. You allocate your income in percentages: 50% to needs/essential expenses, 30% to wants/non-essential expenses and 20% to savings or debt.

Is paying off debt more important than saving?

It depends on your situation. High-interest debt, such as credit card debt, should usually be paid off first. However, it’s also smart to have a small emergency fund to avoid relying on debt. Finding a balance between paying off debt and saving depends on your financial goals.

What is the 777 rule for debt collectors?

The 777 rule, also known as the 7-in-7 rule, sets limits on when debt collectors can reach out to you. They can contact you up to seven times in seven days, but once they’ve spoken with you about the debt, they must wait at least seven days before reaching out again.⁴

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Reviewer: Adam Olson, CFP®, LUTCF, FSCP, RICP

Wealth and Retirement Strategist

Adam is a Certified Financial Planner, author and podcast host with a deep passion for helping clients navigate all aspects of personal finance, from financial planning and investment management to life and health insurance. His goal is to empower individuals and families with the knowledge and tools they need to make confident financial decisions. He resides in Norfolk, Nebraska with his wife, Katie, where they are raising their four boys.

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Sources:

1. WalletHub, How Does Credit Card Interest Work? (2025), May 2025
2. U.S. DOJ, U.S. Trustee Program | List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. § 111 | United States Department of Justice, Accessed November 2025
3. Bankrate, Bankrate’s 2025 Emergency Savings Report | Bankrate, June 2025
4. CBS News, What is the 7-in-7 rule with credit card debt collectors? – CBS News, December 2024

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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