How to Pay Off $10,000 of Debt This Year

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When it comes to getting to debt-free, your journey is a marathon, not a sprint. No matter who much you owe, there are ways to optimize your debt repayment strategy to get to debt-free faster. 

One of the biggest barriers to paying off debt quickly is the mental hurdle of debt fatigue. Setting up systematic approaches like regular payments can help alleviate some of the emotional toll of paying off debt. 

How to pay off $10,000 of debt this year

If you want to be $10,000 closer to debt-freedom this year, there are a few things you’ll need to do. Thankfully, most of them are one-time setups you simply have to establish and let time take care of the rest!

1. Figure out exactly how much you owe

You can’t pay off debt you don’t know you have! This is why the very first thing you should before you start your debt repayment journey is to figure out exactly how much you owe. 

This can be as simple as logging into your online banking and checking all the balances on your student loans and credit cards, and entering the total in a notebook or spreadsheet. Make sure to include other details like interest rate, minimum payment, and credit limit so you have a ready reference for all the essential data.

There’s a great free tool for tracking your debt (as well as comparing different repayment strategies!) called It’s incredible!

If you want to confirm your totals, or just make sure you haven’t missed anything, make sure to check your credit report. You can get your credit score and credit report emailed to you for free each month from Borrowell

2. Consolidate high-interest debt on a low-interest line of credit or credit card

If at all possible, it’s worthwhile to see if you can consolidate your debt on a low-interest line of credit, loan, or balance transfer credit card. If you have personal or department store credit cards charging you 19.99% or 24.99% (or more!) interest, this step is a must. 

Debt consolidation is not an option for everyone, but if it’s available to you, take advantage. Many credit cards will offer balance transfer promotions with interest rates from 0% to 3% for a promotional period of 3 to 12 months. If you can get one or more debts paid off during this time, transfer them and take advantage!

Need more info? Check out our post, Should You Use a Line of Credit to Pay Off Credit Card Debt?

… but watch out for fees

Before you start moving balances around, make sure to read the fine print. Most credit cards offering balance transfer promotions charge a balance transfer fee of 1% to 3%. It is often still worth it to pay this in order to take advantage of their low-interest rate offer, but just keep your eye open for it so it doesn’t surprise you.

Likewise, be aware of what your interest rate will increase to after the promotional period is over, and how it will be charged. Some cards retroactively charge interest on the entire balance for the promotional period ends. If the interest rate goes from 0% to 19.99%, this can end up costing you more than leaving the balance on the original credit card would have!

3. Choose a strategy, like the Debt Avalanche or the Debt Snowball (or a blended approach!)

The best strategy to pay off your debt is whichever strategy gets your debt paid off. Some people will beat you over the head to choose “lowest interest no matter what!”, but if the Debt Avalanche method burns you out and you quit, the result is the same as not paying off any debt at all. 

If you want a detailed comparison of these tactics, check out The Debt Avalanche vs The Debt Snowball!

Once you commit to a strategy, you can use supplemental tactics like The Debt Snowflake or this simple debt hack to supercharge your repayment. Really succeeding at paying off debt is a matter of setting a regular payment you can afford, and then topping it off whenever you have money to spare.

If you’re really feeling ambitious, use a major cash windfall like an income tax refund or bonus at work to pay down what you owe. You can also take on a part-time job or side hustle to make an additional monthly contribution to your debt on top of your regular payment to help you pay it off faster. 

4. Once you’re on the right track, it only takes time

One of the most frustrating aspects of paying off debt is simply waiting for the time to pass. Once you line up all your automatic payments, there’s really little else you can do except let it go!

When you’re in this phase of debt repayment, the best thing you can do is not check your balances every day. While it might be tempting to open your web browser and agonize over the interest accumulating, it’s not helpful.

Unless you’re making a payment or updating your net worth tracking, don’t check your debt balance. Remember, you need to care for your mental health as much as your bank account!

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