In Debt Management, Financial Planning, Personal Finance

Debt is a huge reality for many Americans. According to, American household debt hit a record $13.21 trillion in 2018. It’s a problem, and it’s a problem too many households seem willing to accept as normal or unavoidable nowadays.

As a financial planner, I work with many clients with steady and high incomes… and debt – mostly student loan debt, car financing debt, mortgage debt, and, yes, credit card debt. While most people understand how they got into debt, less are able to successfully overcome the cycle of perpetual debt accumulation once they are in it.

There are a few tried and true tactics for breaking the cycle of debt and staying out of debt once and for all.

Debt By Age

First, let’s start by leveling the playing field. Debt is something that affects everyone no matter your race, ethnicity, and socioeconomic status. Debt does not discriminate, and people from low incomes to high incomes can find themselves within a vicious cycle of debt accumulation.

Here’s the average amount of debt for each age group, according to the Federal Reserve (2016):

Under 35: $67,400

35–44: $133,100

45–54: $134,600

55–64: $108,300

65–74: $66,000

75 and up: $34,500

If you are someone who is currently carrying debt, know that you are not alone in your struggle.

What You Can Do to Pay Down Debt Quickly

Here are five simple, yet effective, steps you can take to start paying down your debt quickly and then stay out of debt in the future.

  1. Create a debt-paydown plan: You first have to commit to paying off your debt. You have to be intentional and prioritize debt repayment as one of the first ways you spend your money before other expenditures after your fixed and non-negotiable costs are covered. Your plan should be specific, include paying at least the minimum to each debt, and prioritize debt payments in order of smallest to largest. Taking a page out of the Dave Ramsey playbook, this method is called the Debt Snowball Plan and allows you to pay off your smallest debts first and then roll even more cash into your biggest debts as you get to them and the ability to pay them off quicker.
  2. Automate your cash flow: Once you have a debt-paydown plan in place, do yourself a favor and automate your cash flow so that you can put your finances on autopilot and ensure you stick to your goals and debt repayment. This entails proactively assigning your earned income to expenses every month before you incur them. Therefore, if you have a credit card you’re paying off, automate a monthly payment to the card every month until it is paid in full.
  3. Don’t accumulate new debt: I know this can be tricky, but if you are serious about getting out of debt and staying out of debt, you’ll observe this critical step. This means that you won’t charge anything new to your credit card until you have your balance paid off completely. You are not going to finance a new sofa. Instead, you will slowly save up until you can pay for it outright. It can be incredibly uncomfortable, in the short-term, to tighten the reins on your spending but just remember that it is serving a greater purpose for your long-term financial well-being.  
  4. Increase your income: It is true that people of all income levels experience debt. The fact remains that the more income you have, the more resources you have to pay off debt. If you have the ability to increase your income, do it. Ask for a raise, work toward a promotion, consider switching employers, or start a side-hustle. Chances are, you have the potential to earn more money than you are right now. It just may take a little courage or creativity to realize it.
  5. Throw any extra money at your debt: Tax refunds, birthday checks, unclaimed money, inheritances, or any extra windfalls that boost your monthly income above and beyond your planned income should get thrown into paying off your outstanding debts so you can pay them off even faster than planned.


While these five steps are effective at paying off debt quickly, they are also effective at keeping you out of the cycle of debt. Operating your finances according to plan, automating your cash flow, avoiding new debt, increasing your income, and prioritizing windfalls are all healthy money behaviors that can keep you out of future debt and on track to reach financial independence.



Do you need help with aggregating all of your financial accounts in one centralized location, establishing a budget, and automating your savings? Well, I can help!. I am super excited to offer readers of the FRANKly SPEAKING Financial Planning Blog access to Future Map Financial’s secure Financial Planning Tool. This free tool will help you:

  • Create financial goals.
  • Review your cash flow history by aggregating your financial accounts (i.e. checking acct, savings acct, credit card accts, student loan accts, etc.). The account aggregation tool pulls in all your financial transactions for the past three months and updates daily.
  • Establish and monitor your budget.

Access the secure Financial Planning Tool by clicking HERE


Be sure to visit us again in two weeks for the next issue of FRANKly Speaking where I’ll share tips and tricks you can employ to reach financial independence and retire early!

As always, I invite you to reach out to me – in real life – with any comments, feedback, or questions!  [email protected] Are you ready to take the first step towards securing your financial future? If so, schedule your free 45-minute no-obligation consultation with me today. Schedule Your Consultation with Frank.

Disclaimer: The information contained in this article is for informational purposes.  None of the information provided in this article is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. Please consult with your accountant, finance professional, and/or legal counsel regarding your specific circumstances. Reproduction of this material is prohibited without written permission from Frank Shields, and all rights are reserved. Read the full Disclaimer.


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