This week I made the last payment on my last credit card thus making me debt free. It’s an amazing feeling seeing all of my accounts with pluses next to them rather than minuses. I especially like knowing that I’m not paying anyone interest on anything anymore! Most of all, that debt is behind me. It was such a useless, nothing to show for it, debt that was weighing me down and a constant reminder of the bad decisions I’d made in the past.

So, the big question is how did I do it? Nearly everyone who I mention to that I’ve paid off $16k in less than 10 months asks that question and you know what? It’s something that I’m pretty proud I achieved.

“But how did you do it?” Ok ok, I’m getting there.

First though, I’m going to begin with an idea I once saw of encouraging paying off debt, it isn’t something I used but it was an idea I really liked:

The Debt Chain

1. Get a bunch of paper and start cutting long strips, once you’ve done that you’ll need to glue, staple or tape the strips into loops.
2. Make a loop for every $100 worth of debt you have e.g. if you have $1000 in debt you’ll make 10 loops and join them together to create a chain
3. Hang the chain up around your house somewhere visible (no, not in the spare room you never step foot into), whenever you pay off $100 of debt you cut off a chain until you have none left. This way you can have a visual representation of your debt disappearing.

If I’d used that method I would have been swamped in loops, as such I decided not to use it but I think it’s great for smaller amounts of debt and when you need a bit of encouragement in getting those payments made.

A few months ago I wrote about some tips on decreasing debt which worked for me and were things I did to minimise how much interest I was paying and to get out of debt as fast as possible. Now that I’m out of debt I wanted to share the things that I’ve found helped me the most.

 1. Balance transfer

There is absolutely no way that I could have paid off as much as I did as fast as I did without balance transfer deals/cards. They make paying off debt so much easier because you’re not weighed down with that huge interest hit each month. If you are able to get a balance transfer card I would definitely recommend it, even if it doesn’t cover all your debt at least get a chunk onto a low interest card or loan and make sure to pay it off during the low interest period. That is the most important part! Banks/lenders give you these great deals because they don’t expect to you to pay them back in their low interest period and are just waiting until you’re back up to 20%. Prove them wrong!

2. The right people

Do you have one of those friends that whenever you see each other they want to go shopping or to expensive restaurants? Even when you tell them you’re trying to save money? These are the people you probably want to stay away from initially, the ones that encourage you to spend your extra money instead of putting it onto debt or into savings. I was really lucky to have some good influences on my side like Jarrod who would encourage me not to buy all the pretty things (except fancy icecream/gelato) and keep on saving or paying off my cards. I probably wouldn’t be in this position if it weren’t for him. So think about it and find these people in your life and ask them to help you along the way.

 3. Cheap living

Yes, I did the inevitable and moved in with my Mum. She was nice enough (or maybe it was a curse) to let me move in rent free. It’s been a great opportunity to get a lot of money paid off and put away but it’s also been a tough and somewhat frustrating experience. I’ve focused on the positives (mostly) of what this has allowed me to do and it is definitely something worth considering if you have the option. Even if not moving in with a parent or family member, sharing a place instead of paying the rent/mortgage by yourself can really make a difference.

4. Cancel the accounts and cut up the cards

I know from past experience that I would pay off a card and then I’d see something tempting to spend on it again, because I had all the credit available! Might as well use it, right? No! cut up that card (my last one is pictured) and cancel the account as soon as you can. This means learning to say no. Today when I called up to cancel my last card I was on the call for 11 minutes, there was no hold involved in this time, I was just trying to cancel the account. I was offered alternatives deals, different types of accounts, you name it and I was offered it. Then after all that it was suggested that, as my account had no annual fee there would be no charge in keeping it open, what could be the harm in that? NO! NO! NO! Be persistent and make sure you follow through. The only alternative to this advice is if you have more debt that you could balance transfer, you’ll usually find a bank has some great deals if they think you’re leaving.

Yes, that’s it, combined with the ideas in my previous posts. It really isn’t that hard, you just have to persevere. As it stands now, I have no credit cards or loans for basically the first time in my adult life.. since that first temptation of a card landed on my lap at 19. It would have been great if I’d been smarter about my money and not let debt accumulate so much but that’s life and as I mentioned before it’s all done now and it feels like starting anew.

I hope this helps at least someone out there, comment on how you pay off debt/save money and if you have any questions.