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8 Things Successful People Do Differently to Get Out of Debt

The idea of getting out of debt can be so overwhelming, you might not think it’s possible for you. I’m here to tell you it’s not only possible, it’s fail-proof when you know what to do and how to approach the journey to debt-freedom. I’ve been coaching people through the process for years, and I’ve seen the transformation happen first-hand. Here’s the thing: you can learn all the great information out there about paying off debt, but there are key qualities that separate the successful from the unsuccessful. Here are eight things successful people do to get out of debt.

1. They follow a system

The two most popular methods for getting out of debt are the avalanche method and the snowball method. The avalanche method has you list your debts in order of interest rate, so that you minimize the amount of interest you pay. It emphasizes the most logical plan in a purely mathematical sense.

The snowball method has you line up your debts from smallest to largest balance, regardless of the interest rate. You apply as much extra as possible to the first debt on the list, and pay the minimum on the rest. When the first debt is done, you cross it off the list and apply all the money that was going toward the first one to the second debt, and so on, so that the money “snowballs.”

Related: What’s the Best System for Paying off Debt?

I advocate the snowball method because it takes human behavior and psychology into account, and there’s a considerable amount of research supporting it as the most effective way for getting out of debt.

But whether you choose the avalanche system or the debt snowball, pick a system. Successful people do not pay extra on chunks of debt at random. They make a plan and follow it consistently.

2. They separate needs from wants

Many so-called needs are actually wants. Needs are anything that is essential to survival; wants are anything that improves your quality of life but won’t kill you if you don’t have it.

Needs are food, shelter, clothing, and basic means of transportation.

Plenty of non-essentials are still perfectly justifiable. Professional haircuts (as opposed to DIY haircuts), makeup, gym memberships, and birthday gifts are a few examples. Whether you keep these in your life or temporarily sacrifice them is completely up to you.

What successful people understand is that every non-essential they keep is a trade-off. They’ve weighed the decision and they are okay with pushing back their debt-free date by one month if it means they can get a professional haircut and color every eight weeks.

On the other hand, they are willing to make lifestyle changes and sacrifice in other areas. They are realistic about their needs, such as doctor bills and utilities, but they may be willing to sacrifice cable TV in order to keep their gym membership.

3. They don’t let a mistake hold them back.

Paying off debt is kind of like going on a spending diet. Every now and then, we are all bound to make a mistake and overspend or buy something that sets us back.

Successful people don’t let a mistake completely derail them. They own up to it, get back on track, and do better the next time. They use mistakes as reminders of what’s really important, and they get even more focused on the goal.

They don’t excuse their mistakes, nor do they beat themselves up about it. They simply acknowledge it, learn from it, and move forward.

4. They have a reason why.

Unfortunately, most people are hurting, stressed out, burned out, and scared because something bad has happened by the time they get serious about getting out of debt.

That doesn’t have to be the case, though. All you need is a strong reason WHY you want to be debt-free. As Dave Ramsey likes to say, you have to be sick and tired of being sick and tired.

Dig deep and think about it: what could you do with all the money that’s currently going toward debt payments? How would your life and your family’s life change? What kind of example could you set for your kids when it comes to handling money? What kinds of life choices would being debt-free open up for you? How much more could you give? How much less stress would you have?

People who successfully get out of debt know the answers to these “why” questions, and it fuels their motivation.

5. They celebrate their success.

Getting out of debt isn’t about punishing yourself for past financial mistakes. It’s about learning a new way of managing money, and that means celebrating success!

Successful people set benchmark goals along the way, they reflect on what they did well, and they keep their motivation up by recognizing their progress and celebrating it.

That doesn’t mean they spend lots of extra money. It could mean coloring in a visual debt-payoff tracker, or using leftover grocery money to eat out once a month. 

6. They work more.

In my coaching experience, most debt-free stories involve extra work. It’s correlated with a willingness to do whatever it takes and to be a little creative with schedules, if necessary.

Free Cheat Sheet: 50 Ways to Save $1000 in 30 Days in The Determined Dollar Resource Library

People who are unsuccessful aren’t motivated to add to a 40-hour a week work schedule. They feel it’s more important to be moderate so as to not get burnt out.

Successful people see an extra work shifts, side hustles, and second jobs as an opportunity claw their way out of debt even faster. If they can shave six to twelve months of their debt snowball, they’ll pick up that second job and work six days a week for 10 hours a day. They’ll find creative ways to work from home at night while their kids are asleep. They aren’t intimidated by a temporary season of extra work. In fact, they welcome it.

7. They use a zero-based budget.

Successful people make a plan for all of their money, not just the debt. When you make a zero-based budget, you are taking control of every dollar of income, and that’s going to save you hundreds of dollars every month that was previously being spent who-knows-where.

A zero-based budget puts you in control of your money instead of letting it control you, and that’s where financial freedom starts.

If you’re new to the idea of zero-based budgeting, my free budgeting mini-course will help you set up a budget that works, without the guesswork and struggle. You can enroll for free here.

8. They Make Choices, Not Excuses

Word choice reveals a lot about the way we view our relationship with money. Unsuccessful people use words like “I had to…” whereas successful people say, “I decided to…”

People who are unsuccessful with getting out of debt see themselves as victims of their circumstances. There are definitely circumstances out of our control, but successful people recognize that there are often choices they can make to maximize their success.

If it’s difficult to make minimum payments, much less pay extra, successful people will think of what else they can get rid of. For example, they will CHOOSE to sell the second car and take the bus to work, even though it adds half an hour to their commute.

They don’t say “I have to have two cars because…” Instead, they will say, “It’s convenient to have two cars, but I could choose to ride my bicycle or use public transportation to get to work.”

Related: 5 Ways Your Brain is Sabotaging Your Budget

Ultimately, successful people are willing to work more, they use a plan, they follow a budget, and they take responsibility for their choices. Their “why” keeps them motivated to stay on track, and they have a positive attitude that allows them to move forward when they make a mistake and celebrate success along the way.

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Do these 8 Things to Get Out of Debt Quickly #debtfree #debtsnowball #getoutofdebt #payoffdebt #daveramsey

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