How to Become Debt Free the Smart Way (Without a Budget)

Surprisingly, or maybe not so surprisingly, only about 20% of Americans say they are debt free.  We all know the feeling of having debt.  It can be a burden.  And the path to becoming debt free can seem long and hard.  

But it doesn't always have to be this way.  There is a light at the end of the tunnel.  You can get out of debt now if you want to.  There are things that you can do to get out of debt quickly and, best of all, it doesn't  actually require using a budget! 

The road to debt freedom can be as long and as hard as you want to make it.  You have the control.  All it takes is your commitment.

Ready to get started?  Here’s what you need to do:

1.  Choose Your Desired Debt Free Date
2.  Make the Commitment 
3.  Calculate Your Monthly Payments
4.  Pay Your Debt First
5.  Stay Focused

I admit this is a little different from the usual pick your pay off method, avalanche or snow ball, and then go for it advice.  

But I want to give you a different way to approach your debt problem. Bear with me and I can teach you how to become debt free.

Choosing Your Debt Free Date

The key to paying off your debt once and for all is to start with the end in mind.  After all, there's no way you'll know how to get there if you don't know where you're going.

So, the first step to finally paying off that pesky debt and becoming debt free is choosing your pay off date.  When do you want to have your debt paid off by?  Better yet, when do you want to be debt free?  Think about this and choose a realistic date.  

Though I know many of you, if you are like me, will want to have that thing paid off today, that may not be feasible.  For now don’t worry about the monthly payments, just choose a reasonable date.

According to credit.com, a person in $10,000 of credit card debt can pay it off in 3 – 5 years making monthly payments between $200 and $350.  So if you only have $5k of debt, maybe your goal is to pay that off in a year.

In choosing your date don’t be afraid to push yourself.  Making it a bit of a challenge can give you something to strive for.  Be careful not to make it too hard though as that can be very disheartening and make you give up.

Make a Commitment

Now that you have decided on your pay off date the next step is making a commitment to do so.  Paying off debt can be tough. So by making a strong commitment to do it can go a long way in keeping you focused on your goal. 

This is easier said than done as little things can pop up to distract you from your goal. That’s why I recommend you write down your commitment and post it on your bathroom mirror or above the kitchen sink or even on the front door.  

Anywhere you think you are likely to see it and see it often.  

By continuing to remind yourself of your commitment you will be more likely to follow through.  

Here’s an example commitment statement:

I, ______________, am committed to paying off my debt by  (Date).  I will not stray or be distracted by things of lesser importance.  And I will do everything in my power to follow through on this commitment.

Of course, you can write your own commitment spiel but I do recommend putting in the date you want to have it paid off.  This will continually remind you that you have a deadline and push you to keep going.  I also recommend reading it aloud at least once a day.

Also, if you are actually going to be debt free for real, you’re gonna need to commit to no new debt.  Period.  It's like that DJ Khaled song, "No New Friends" except we are talking about debt.

Adding new debt will just make it harder and take you longer to accomplish your goal.  It is hard enough as it is.  You do not want to make it worse by adding on more debt.

So go on, add that to your commitment pledge – No New Debt.

Calculate Your Monthly Payments

Things could get a bit complicated if you have different forms of debt (student loans, credit card debt, etc.) with varying interest rates that you want to attack at the same time.  

I would say, for now, just focus on one type of debt, i.e. credit cards. Then, once those are gone, focus on the next one.

Starting with credit card debt, could help you eliminate the debt with the highest interest first.  And probably your credit card debt is less than your student loans.  

So paying off your credit card debt, could offer you a boost of encouragement to pay off your student loans next.

Pay Your Debt First

You may be familiar with the phrase “Pay Yourself First”.  This is like that except applied specifically for your debt.  

Whenever you get paid, whether its monthly or every two weeks, you are going to immediately use that money to pay for your debt according to your plan.  

No if, ands, or buts.  Do it first thing. 

Even if your check is smaller this month, you'll want to do it anyway.  One, to honor your commitment and two, to really make it a habit.  

Looks like you will just have to make some adjustments to your normal spending habits is all.  Think of it as a challenge and it could be fun.

To make this easier on yourself you may consider automating it.  Set up an automatic payment plan with your bank.  That way you wont have to spend your time sending it every month yourself.

Stay Focused

Once you have chosen your debt-free date, made your commitment, calculated your monthly payments, and your plan is in motion by making those monthly payments first, all that is left to do is to stay focused.  

Remember to keep reminding yourself of your goals and read your commitment aloud at least once a day.

Things happen, distractions appear but you have to remember to stay the course.  And hey, isn’t that the first rule of the law of attraction??  Okay, maybe not but you get my point.  Eye on the prize man!  Eye on the Prize!

All in All

It can be a long road but it doesn't have to be a difficult one and, really, you get to choose just how long that road actually is.  You are in control.  You may have been trying for years to pay off your debt.  Well now is the time.  

You are not going to be trying any longer, you are going to be doing.  It’s time to take control and kick that debt to the curb.  Imagine the freedom you will feel when you are finally, truly debt-free!