7 Surprising Habits That Help You Get Out of Debt Faster

Struggling to pay off debt can feel like an uphill battle, but the truth is, there are some surprising everyday habits that can actually help you get out of debt faster. As a personal finance coach with 6+ years of experience, I’ve seen firsthand how small changes to your routine can have a big impact on your debt payoff progress.

In this guide, I’ll share 7 research-backed habits that can accelerate your debt freedom, plus debunk some common myths about the “right” way to get out of debt. By the end, you’ll have a clear action plan to start implementing these practical strategies in your own life.

1. Prioritize Paying Yourself First

The Science: Automatic Savings Boost Debt Payoff

Several studies have found that people who use automatic savings transfers are more likely to stick to their financial goals and pay down debt faster. In one survey, 72% of people said that automatic transfers made it easier to save consistently.

How to Apply It

1. Calculate how much you can realistically afford to save each month.
2. Set up recurring transfers from your checking to a dedicated debt payoff savings account.
3. Treat this as a non-negotiable “bill” that gets paid first before other expenses.

2. Use the “Cash Envelope” System

The Science: Cash Spending Reduces Overspending

Studies show that people tend to spend more when using credit/debit cards compared to cash. One PubMed study found that consumers spent 12-18% more when using cards instead of cash.

How to Apply It

1. Analyze your past 2-3 months of spending to determine your average weekly costs for variable expenses.
2. Withdraw that amount in cash at the start of each week and divide it into labeled envelopes.
3. Use the cash envelopes to pay for those expenses, and stop using cards for those categories.

3. Schedule “No-Spend” Days

The Science: Mindful Spending Reduces Impulse Buys

Numerous studies have found that the simple act of pausing before making a purchase can help reduce impulsive spending. One experiment showed that a 5-second delay reduced purchases by 45%.

How to Apply It

1. Identify your most common spending triggers (e.g. online shopping, eating out).
2. Schedule no-spend days where you avoid those triggers and only spend on essentials.
3. Plan fun, low-cost activities to keep yourself occupied on no-spend days.

4. Leverage the “Snowball” Method

The Science: Small Wins Boost Motivation

Paying off smaller debts first, known as the “snowball method”, has been shown to be more effective than the mathematically optimal “avalanche method”. A PubMed study found that people using the snowball method were 15% more likely to become debt-free.

How to Apply It

1. Make a list of all your debts, including balances and interest rates.
2. Order the list from smallest to largest balance, regardless of interest rate.
3. Pay the minimum on everything except the smallest debt, then throw all extra money at that one.

5. Automate Your Payments

The Science: Consistent Payments Prevent Late Fees

Paying bills on time is critical for building healthy financial habits. In fact, a study by the Federal Reserve found that late payments are the leading cause of credit score drops.

How to Apply It

1. Log into your lender/creditor accounts and set up automatic recurring payments.
2. Schedule the payments to come out a few days before the due date, to account for processing time.
3. Review your budget to ensure you have enough in your account to cover the payments.

6. Increase Your Income on the Side

The Science: Extra Income Accelerates Debt Payoff

Numerous studies have found that earning extra income, even in small amounts, can significantly boost debt payoff speed. One PubMed review showed that people who earned side income were able to pay off debt 1.5 years faster on average.

How to Apply It

1. Brainstorm skills, hobbies, or talents you could turn into a side gig.
2. Set aside a specific number of hours per week to work on your side hustle.
3. Allocate 100% of your side income directly to debt payments.

7. Review Your Progress Regularly

The Science: Accountability Boosts Motivation

Studies consistently show that regularly tracking and reviewing your financial progress helps maintain motivation and accountability. One survey found that people who review their finances at least monthly are twice as likely to feel in control of their money.

How to Apply It

1. Schedule a monthly “money date” to review your finances.
2. Celebrate small wins and re-evaluate your debt payoff plan as needed.
3. Share your progress with an accountability partner for extra motivation.

Common Misconceptions Debunked

Before we wrap up, let’s address a few common myths about getting out of debt:

1. Myth: The fastest way is to pay the highest interest rates first. Reality: The snowball method (paying smallest balances first) is more effective for most people.
2. Myth: You need a second job to make a real dent in your debt. Reality: Small lifestyle changes and consistent habits can make a big difference over time.
3. Myth: Debt consolidation is the best solution. Reality: Debt consolidation can help, but it’s not a magic bullet. You still need to address the root causes of overspending.

Frequently Asked Questions

1. How long will it take to get out of debt? The timeline depends on your total debt balance, interest rates, and how much you can afford to pay each month. With consistent effort, most people can become debt-free in 2-5 years.
2. Should I prioritize saving or paying off debt? Focus on paying off high-interest debt first, while still saving a small emergency fund of $1,000-$2,000. Once the debt is gone, you can ramp up your savings.
3. What if I slip up and overspend? Don’t beat yourself up. Debt payoff is a marathon, not a sprint. Just get right back on track with your budget and savings plan.
4. How can I stay motivated long-term? Celebrate small wins, track your progress visually, and find an accountability partner. Remembering your “why” can also keep you going.
5. Should I use a balance transfer credit card? Balance transfers can be helpful if you can pay off the debt before the intro APR expires. But be wary of fees and watch out for new spending on the card.
6. What if I have student loans? Student loans often have lower interest rates, so focus on paying off higher-interest debts first. Look into income-driven repayment plans to lower your monthly payments.

Becoming debt-free may feel like a lofty goal, but with the right habits and mindset, it’s an achievable reality for most people. By implementing these research-backed strategies, you’ll be well on your way to gaining control of your finances and building the life you truly want.