A debt repayment plan doesn’t have to be a 30-page document with charts, graphs, and 30-year projections. As you know, if you’re in debt, that’s the last thing you need.

What’s better is having a plan that not only gives you hope but a plan that by the time you’re done — you’re already seeing results. 

A plan like this doesn’t require 30-pages and killing trees.

Actually, all it takes is 18-minutes.

Ready to create that plan for yourself?

Let’s give it a go!

Creating Your Debt Repayment Plan

Step # 1 – Find Out How Much You ACTUALLY Owe

5 Minutes

A few years ago, I had a medical bill go to collections I was unaware of (they sent it to the wrong address). Frustrating I know but a story like this is unfortunately common.

One recent FTC Report found 20% of Americans have an error on their report. Another study found 10% of Americans have an unpaid collection out for an amount less than $125 on their credit report.

That’s why step # 1 to becoming debt free is learning what you owe and to whom. And the smartest way to get this information is to review your credit report(s).

One safe and free way to review your report is through Credit Sesame. Credit Sesame gives you access to your credit report and even tells you your monthly payments and interest rate (having this information easily accessible will save you a lot of time).

You can sign up for Credit Sesame and get your free credit report here.

Too, you’ll want to get a 2nd credit report from annualcreditreport.com. This is the free site setup by Federal Law that allows you to access each of your credit reports (there’s 3 major reporting agencies) once a year.

Since Credit Sesame gives you your TransUnion Credit Report, select either to see your Equifax or Experian report. Then, make sure the information on both reports line up.

# 2 – Get Organized

4 Minutes

Inside of Credit Sesame, click on the My Finances then My Debt tab.

Here you get to see every debt, organized by type, along with the balance, minimum payment, and APR information.

Having all this information on hand can save you hours of time vs. tracking down old bills one-by-one.

Here’s what you’ll do next:

  1. Download this free debt reduction calculator (you can use Google Sheets)
  2. Insert your each of your debts into the top column labeled “Creditor Information Table”

Here’s what it may look like:



Next, comes choosing your debt payoff strategy. There’s two methods to paying down your debt as fast as possible.

  1. Debt Snowball – Popularized by Dave Ramsey, this debt payoff strategy has you paying off the smallest debts first.
  2. Debt Avalanche – This method has you paying off your debt with the highest interest rate first.

There’s no one right answer here. The goal is to pick one strategy and stick with it.

Personally, I like the debt snowball method for anyone who has three or more debts they’re looking to payoff. But again, pick the one that makes the most sense to you and stick with it!

# 3 – Find a Lower Interest Rate

4 Minutes

I like getting big results from the least amount of effort. That’s why it’s important not to overlook this next opportunity.

With any debt, you want to pay the least amount of interest. Less interest means more money going towards paying down principal–saving you A LOT of money.

That’s why step # 3 has you taking a few minutes to make sure the rates you’re paying are indeed the lowest.

Keep in mind, there’s both refinancing debt and debt consolidation. Debt refinancing means to take say an auto loan and refinance it with a new bank, which offers a lower rate.

Debt consolidation means taking multiple debts, e.g. credit cards, and combining them into one smaller payment at a lower rate.

With that in mind, take a few minutes now to make sure you’re paying the lowest rate:

  1. Compare Mortgage Rates – Compare today’s mortgage rates from competing lenders at Credible.
  2. Compare Student Loan Rates – Easily search and compare refinance rates from top lenders with Credible.
  3. Compare Auto Loan Rates – Compare up to 5 real, custom offers from multiple lenders in minutes with LendingTree.
  4. Compare Personal Loan Rates – Get personal loan rates to refinance credit card debt from up to 7 lenders in two minutes with Credible.

The average credit card rate is well-over 15%. As such, if you’re able to refinance to say 7%, you’ll payoff your debt much quicker. One option for scoring a lower interest rate is Tally, a debt consolidation service that provides a line of credit designed to save you money and pay off you debt as fast as possible. 

# 4 – Trick Yourself Into Spending Less Than You Earn

3 Minutes

The data is clear we spend more when paying with credit over cash or debit. One study showed around 12 to 18% more.

But carrying cash around in today’s world is a hassle.

That’s why for those struggling with debt, I recommended Debitize.

Debitize is an app that allows you to force yourself into only spending the cash you have on hand.

Here’s how it works:

  1. Sign up here for free
  2. Make purchases on your credit card as you normally would
  3. Debitize will deduct the amount from your checking account each day
  4. At the end of the month, Debitize will pay your credit card bill

If you’re spending more than you earn each month and budgeting isn’t working–give Debitize a try.

# 5- Earning Income Without A Huge Time Commitment

2 Minutes

When you’re constructing a plan to payoff debt, it’s all about momentum. You want to build a momentum today–that will spark inspiration for the weeks, months or years ahead.

What builds momentum is action. Take a bit of action now, get some results. Take more action later, get more results. This is the type of positive feedback loop you want for yourself.

In step # 5, the goal is to widen the gap between your income and expenses.

There’s two ways to widen this gap:

  1. Save more money
  2. Make more money

The wider this gap gets, the faster you can payoff your debt.

Saving money can be pretty straightforward (If you’re looking for ideas, here’s 100+ of them).

Making money though, doesn’t come as easy to most of us.

If never made good money outside of a job, here’s a few ways to start making money, anyone can take advantage of, that don’t take a lot of time.

You’re not going to get rich with any of these ideas. However, $150 or so a month can really add up overtime when it comes to paying off debt.

Moving Forward with Your Debt Repayment Plan

From here on out, your goal is to continue to widen the gap between your income and expenses.

With any extra money, you’ll then put it towards either your highest interest deb (debt avalanche) or debt snowball (lowest total debt).