Most Americans are paying off some kind of debt, whether you’ve got student loans, a car loan, a mortgage or high-interest credit card debt.
Sometimes, debt is part of a long-term financial plan (like if you hope to one day make money on the house you’re renovating). But other times, we find ourselves in debt because of unexpected circumstances, or simply because it’s tough to make ends meet.
Juggling all this debt is one reason why so many people are stressed about money. But there are steps that people can take to break the cycle, and those who have managed to put a big dent in their debt will tell you that it is usually worth a little sacrifice.
Below, CNBC Select spoke with four people who paid off a lot of debt to get their tips on how to stay motivated and find success.
Develop new skills to make extra money
Katia Chesnok was working a 9-to-5 job at a bank when her credit card debt was sent to collections.
It was a wake-up call: She realized she couldn’t ignore her debt any longer, but she needed to find a way to earn more money fast.
Thanks to the advice of her colleague, Chesnok enrolled in a free marketing certificate course through Google’s Digital Garage. Within a month, she’d completed three certificates (absolutely free) and had the skills she needed to start a side hustle helping local businesses generate more online traffic and revenue.
“There’s a limit to how much we can save every month, but there’s no limit on how much we can earn,” says Chesnok. As her side hustle income grew, she was able to divert that new surplus of cash to pay off her debt.
She automated her payments every month, a trick she says is key for anyone juggling multiple jobs and bills.
“By automating my own payments, I was very consistent,” she says.
Chesnok was getting paid twice a month, on the 15th and the 30th. She called her card issuers to set up autopay near the beginning of the month so she knew the money would be there and she’d have no problem covering the bill.
Have date night at home to save money
In 2016, Divya Sangam was credit invisible and thought she was safe from debt because she paid for everything in cash.
But she made an error while filling out her W4, and she and her partner were hit with a surprise tax bill that they couldn’t pay off right away.
One of the couple’s favorite hobbies is going to the movies, especially to their local theaters in New Jersey that show movies in all three languages they speak — English, Hindi and Tami.
After they paid off the debt, Sangam and her partner have decided to maintain their tighter budget: “Going to one movie a month seems like such an indulgence now,” she says. “Especially to our favorite AMC dine-in theater where you can relax on the recliner or have a burger and milkshake brought to your seat.”
With the extra savings from their new routine, the couple is padding their emergency fund and saving up for a down payment.
Still do what makes you happy
Entrepreneur Michelle Jackson has paid off over $60,000 of credit card and loan debt since 2012. When she started, the debt felt like “a mountain,” and she knew that if she was going to tackle it, she couldn’t make the journey miserable.
“I knew that if I tried to eliminate everything that I enjoyed from my life in order to achieve this goal, I would fail,” Jackson says. “So, I decided to be honest about the things that I enjoyed as I began.”
Jackson continued ordering avocado toast, she tells CNBC Select. And if you’re wondering about coffee — she kept buying that, too. However, Jackson was more discerning about when she treated herself, and she kept her coffee drinks simple, saying no to add-ons like extra espresso shots and flavors.
Jackson even traveled frequently. “Those trips helped keep me sane and reenergized me each time I felt a little low,” she recalls.
But instead of charging travel costs on a credit card, she saved up to pay for her trips in cash. She stayed at upscale hostels, rather than expensive hotels, to enjoy a unique experience on a budget.
As for self-care, Jackson still took dance classes but found ways to lower the cost by doing work-exchange programs at the studio.
“Basically, I systematically worked through my wants and figured out ways to enjoy them at the same quality while spending less,” she says.
Don’t be afraid to learn new things
Credit repair coach Shanté Harris of Financial Common Cents paid off over $50,000 of credit card debt before becoming a certified credit consultant. Now, she has expert-level knowledge about the credit industry, including how to navigate debt collections and restore badly damaged credit scores.
Paying off her debt was challenging, but Harris possesses one important quality that she credits for getting her across the finish line: teachability.
“I wasn’t born with an 800 credit score,” says Harris. “Everyone is where they are now because they learned something, whether it was a tragic situation or just learning from college or your friends.”
You don’t have to be an expert to get yourself out of debt; you just have to be adaptable and willing to learn.
How to get started
The first step to paying off your debt is knowing exactly how much you’ve got on your plate. Pull your credit report for free at AnnualCreditReport.com to see exactly what accounts you have in your name and what you owe on each.
It’s also important to understand how your debt is affecting your credit score. A common assumption is that if you’re in debt, your score will be bad. But actually, you can still have a good score when you’re in debt. The key is to borrow strategically and make your payments on time.
Signing up for a credit monitoring service will help you track your score and know where you stand. As you pay off your debt (especially revolving credit card debt), you’ll likely see your score improve.
Since FICO scores are used in over 90% of lending decisions, signing up for the FICO® Basic, Advanced or Premier service will help you get a good snapshot at what lenders see. It’s also comprehensive, for when you want to apply for a big-ticket. All plans offer access to 28 versions of your FICO score, including scores for credit cards, mortgages and auto loans. Plus you’ll receive $1 million identity theft insurance and 24/7 access to U.S.-based identity theft experts who can help restore your identity if your information is compromised.
Information about FICO® Basic, Advanced and Premier plans have been collected independently by CNBC and has not been reviewed or provided by the company prior to publication.
$19.95 to $39.95 per month
Credit bureaus monitored
Experian for Basic plan or Experian, Equifax and TransUnion for Advanced and Premier plans
Credit scoring model used
Dark web scan
Yes, for Advanced and Premier plans
Yes, up to $1 million
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.