• Kelsey Houghton

6 Tricks to Afford Extra Payments When You're in Debt

So you’ve read our previous blog posts and decided to pay down your debt using the avalanche method. The numbers don’t lie, and you’re confident this approach will save you thousands of dollars!

You’re inspired to pay down your debt as quickly as possible, you log into your bank account to determine your next payment amount… and suddenly your heart sinks. Where on earth are you going to get this extra money 😅?!

This is a pivotal moment in your debt free journey, and it’s absolutely crucial that you don’t give up here. We firmly believe that you are in control of your own destiny, and your entire financial future could hinge on the mindset you embody in this moment.

By deciding to tackle your debt head-on, you’ve already taken the hardest first step; a shift in mindset that will set you apart from thousands of millennials and fast-track you towards a debt-free life. You’ve got this 💪!

Now that you’re feeling motivated, we want to help you succeed in making tangible changes that will help you pay down your debt, regardless of your income, liabilities, or other financial roadblocks.

Here are 6 concrete money moves that anyone can make to save up the extra cash for making more aggressive debt payments:

Open a separate bank account to better organize your finances

Keeping your debt payment money separate from your spending money is one of the easiest strategies you can use to budget, save up extra money, and avoid overspending. Sticking to a budget is psychologically difficult, and setting aside a certain amount for each category of spending (groceries, entertainment, clothing) rarely works in the age of paying with plastic.

We strongly encourage you to open up a high-yield savings account at a bank that is completely separate from the bank where you hold a checking account. Decide how much you can afford to contribute per paycheck based on your customized debt repayment plan, and set up automatic direct deposits to save this amount monthly in your new account.

If you can, ask your employer to send this amount directly from your paycheck - this way you never see it in your checking account, and never run the risk of accidentally spending it. Soon enough, you’ll get used to not seeing this money (before long, you’ll never even notice it’s missing)!

Each time you reach your goal, take that money and put it all towards an extra debt payment! You’ll be shocked at how quickly money grows when you simply keep it out of sight, and you can’t imagine the relief you’ll feel when you see your debt instantly reduce without feeling that it’s cutting into your separate leisure fund.

Put all your side hustle money towards debt payments

Thanks to technology, it’s easier than ever to make some extra cash through a side hustle. The options are endless: drive for a ride-share, sign up for a dog walking or food delivery app, or find a way to monetize your passion or special skill set (can you coach youth sports or build websites for small businesses?).

Chances are you’re already doing one of these things… but have you thought about deliberately using that money to pay down your debt?

It’s not the sexiest use of your extra funds, but it’s one of the easiest ways to pull yourself out of the hole. Try putting every penny of your side hustle toward debt repayment, and soon enough you’ll have your debt under control!

Reduce expenses without giving up your lifestyle

We are willing to bet that you are paying more money than you need to be paying - period. With just a few hours of effort, you can likely reduce your annual expenses by a few hundred dollars. Think about it - “only $9/month is over $100 in a year! Try counting: how many different monthly fees do you find yourself paying $9 or more?

There are two main steps you can take to reduce your expenses: cutting out bills and subscriptions you don’t use, and lowering the cost of those that you do.

First, make a list of all the monthly or annual subscriptions you pay for (look at your past few months of banking activity for a reminder) and cancel those that you don’t use regularly (do you really need Netflix, Hulu, Amazon Prime, HBO, and cable)? Try to challenge yourself - chances are you won’t miss what you cancel, and if you do, then you’ll know it’s worth it for you to sign up again for the service!

Second, make a list of all the bills you pay and consider a necessity (insurance, internet, cell phone and data, etc.). Spend a few hours shopping around for better prices, and even calling your current provider to ask for a discount; you can mention that you found cheaper options, and may have to cancel if they can’t compete. Many times this will help you score a discount, but if they won’t budge - consider switching to the cheaper option!

This may seem like a headache, but can save you hundreds in the long run.

Increase your income (it’s easier than it sounds)

Okay, so this one might sound like the biggest stretch, and the results will vary for each individual. That being said, we want you to understand that you do have some degree of control over your own salary.

Remember that poster in your classrooms that said, “you miss 100% of the shots you don’t take?” One thing many people don’t realize is that gaining a higher salary often comes down to simply asking for it.

Make a list of everything you’ve done for your company and what you bring to the table. If you can’t think of anything, start keeping track of your accomplishments and contributions so that you will be ready with a list a few months down the line.

Next, go online (to a site like Glassdoor or LinedIn) and see what other people in your profession are making, and what you may have the ability to make elsewhere (or even within your own company if other colleagues have reported that data)!

Finally, present the data and your list of strengths and contributions to your manager, and ask for a specific salary raise (aim higher than you think, so that you might still get a good raise if they negotiate down).

Keep in mind that they may very likely say no - maybe they didn’t expect this ask, and it isn’t in the budget for this quarter. Do not take this personally and do not give up here! Let them know what you will continue to contribute moving forward, and ask when it might be possible to negotiate again. When you follow up next time, there may be a different outcome!

If your employer still turns you down after a few quarters and an annual review, this is a good indication that they aren’t invested in you and it may be time to find a company that is! Did you know the average salary boost employees receive when changing jobs is between 10-20%? When you go to your new job, use the research you performed to ask for the base salary you deserve outright.

Especially if you’re a woman, we want to make sure that you have the confidence to go after the salary you deserve. One reason for the wage gap is that women are less likely to negotiate than men, and by simply doing so your career can skyrocket; not only will you increase your salary with practice, but you will gain confidence and are more likely to be perceived by your employers as a strong leader.

Track every money move with a budgeting app

This one is simple. Download a budgeting app that will allow you to link your accounts and track all your cash, spending, debt, and investments in one place.

That’s it!

It’s crazy how quickly you’ll notice your spending and saving habits start to change when you actually keep track of where your money is going, and see a visual representation of how quickly all those happy hours are adding up.

Gamify your journey, and have fun along the way!

On the flip side, it can be super fun and empowering to track your progress after taking all the steps mentioned above. Turn your journey into a game with yourself, and challenge yourself to take it to the next level whenever possible.

Over time, you’ll see your debts dwindle and your net worth increase in ways it never has before! Before you know it, money will start to trigger feelings of empowerment and opportunity, rather than fear and anxiety, and you’ll begin to see it as a vehicle for choosing your own destiny.

Once your debt is paid off and those pesky interest rates are no longer working against you, you can continue playing the game: use the good habits you formed along the way, and start to invest more, build wealth, and watch as accumulating interest starts to work for you!

Still think you might need a little help figuring all of this out, or even a little accountability? We created an app that solves this entire process for you and more → check us out on iOS or Android!



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