It’s easy to give advice on paying off debt in retrospect. But when you’re in it, you may feel like you’ll never get out. Oriana Nesbit knows it all.
Like many Americans, the 49-year-old project manager from California began using balance transfers in 2023 to help pay off her six credit cards. As of January, she had paid off $12,000 in debt. While this is a significant achievement, she doesn’t expect the remaining debt to be paid off until December.
It would have been easy for Nesbitt to give up and accept that he would live with debt for decades. But despite the bumpy road ahead, she is determined to persevere.
“If you give up, you’re not going to make any progress,” Nesbitt said. “No matter how much progress you make each month, as long as you make a little progress, you win.”
Alaina Fingal, a certified financial coach and member of CNET Money’s Expert Review Board, agrees, noting that there’s no one right way to pay off debt. But if you’re feeling a little stuck on your progress in paying off credit card debt—or aren’t even motivated to try—here are Nesbit’s tips for staying on track.
Find the debt repayment strategy that works best for you
For years, Nesbitt was a single mother who spent her time raising her children instead of saving money as she thought she would, and she worked her way out of debt. The interest rates on her credit cards were as high as 28%, so she felt like she was never making any progress in reducing her debt.
“Initially, I tried to put as much money as I could by making balloon payments,” she said, “but when interest rates are so high, you just keep fighting the interest rates.”
After receiving an unsolicited balance transfer in the mail, Nesbitt realized that the temporary zero-interest period was her chance to finally reduce her balance without being derailed by mounting interest.
She first moved the balance on the card with the highest interest rate, then took advantage of another offer to move the other two cards over the course of a year.
Even if you can’t pay off all of your debt, a lower interest rate can help you pay off most of your debt faster because you’ll have more money to pay it off.
Before you submit your credit card application, read the fine print and make sure you understand the interest rate after the introductory period. “Most companies will increase their interest rates to make up for the losses after special offers,” Fingal said.
Keep track of your expenses
With work, family and daily life keeping her busy, Nesbitt finds it helpful to create a long-term budget. By reviewing her expenses from the previous year, she can plan for the full year, including both typical monthly expenses and expenses that may only occur once a year, such as her car registration fee.
“This budget saves me a lot of money every month—I don’t have to think about it,” she said.
Nesbitt, who describes herself as a “continuous planner,” realizes that budgeting for the entire year can seem overwhelming to some, but it allows her to focus on organizing her budget at the beginning of the year. By creating a monthly budget, she avoids unexpected expenses.
To prevent burnout, she not only budgets for bills, but also saves money each month for vacations and at the end of the year to buy holiday gifts.
“I even gave an extra $5 on my birthday,” she said.
What helps one person pay off debt may not work for another, but keeping track of your spending is crucial. Fingal recommends trying various methods, such as budgeting programs and spreadsheets, to find a tool or strategy that works for you.
“I’ve used apps in the past, but paper and pen have always kept me motivated about my progress,” Fingal said.
Commit to your goals, but be flexible
Nesbitt organizes her budget using Excel spreadsheets to track her regular spending, savings and 401(k) contributions. She gets paid every two weeks, so she budgets her first paycheck each month for most of her expenses, as well as the minimum payment on each credit card. The second paycheck was her fund to aggressively pay off her debt.
“My plan is to make a second payment on my credit card at the end of the month,” Nesbitt said. “The monthly payment will change, but no matter what, the monthly payment is definitely more than 50% more than the minimum payment (credit card payment). I try to at least double the payment – This is my goal.”
After paying off one card, Nesbitt would use the extra money to pay off the second card with the highest interest rate. This strategy is called the debt dump method, and it helps her save more on interest.
Don’t deny everything about yourself
Staying on an “all or nothing” diet can be difficult for anyone. Nesbitt doesn’t use her balance transfer card for anything other than paying off her balance. She only allows herself to use her debit card for expenses outside of her regular budget, which helps her avoid overspending. But she wanted to earn credit card rewards for traveling, so she continued to use one of her current credit cards for planned purchases.
“Rewards cards are for groceries — I stick to a budget when I go to the grocery store and I pay it off instead of using a debit card,” she said. “So I use it every month, but I use it to buy things that are in my budget so I can simply pay them off.”
Credit cards are more convenient than cash, and if you’re used to earning rewards, it can be difficult to stop using them completely while you’re paying off debt.
But even taking a break from using credit cards can help you avoid the temptation to overspend, says Fingal. If using just one credit card makes you overspend, consider getting a debit card with rewards.
“If I know I’m going on vacation, I’ll stop using my credit card and use a debit card to make sure I stay within my budget,” Fingal said.
Know the “why”
Nesbitt’s ultimate goal is to pay off debt, move to a smaller home and retire early. By focusing on these larger goals, she reshaped her perspective on money and debt.
“It really depends on one’s attitude towards money – whether you think it’s something to use or something to save,” she said. “I think a lot of people think a line of credit is there to use, not to save for a rainy day.”
A debt repayment strategy may sound good on paper. But if you’re not aware of how your outlook on money is putting you into debt—or continually putting you into debt—it’ll be hard to stick to your plan. “Understanding your triggers is critical to developing a solid financial strategy,” says Fingal. By understanding your motivations, you can develop healthy financial habits that help you spend your money on the things you value most.
As Nesbitt continues to move toward her goals, she said seeing her debt balance drop — albeit not as quickly as she would have liked — also motivated her to get out of debt.
“I’m very happy with the progress I’ve made and I’ll definitely keep going.”
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