How To Create A Debt-Free Plan For 2022

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Today I’ve created a detailed debt-free plan to help you pay off a large chunk (or all!) of your debt in 2022. My husband and I plan on being student loan debt-free in 2022 and we are SO excited!

In this post you learn:

  • How to choose a debt pay off method
  • Figure out how much you can pay off in on year
  • How to make more money to pay off more debt
  • Things to do to cut expenses to save more money
  • Extra things to do to pay off debt quicker

Before we get started, make sure to sign up for my free resource library and get tons of free printables to help change your financial life.

What you need before paying off debt

Emergency Fund – Before you get started paying off debt, it’s important to have some kind of emergency fund in place. Most experts recommend at least $1,000, and that’s definitely a good starting point. However, at some point you will want to have 3-6 months of living expenses in your emergency fund. 

Have everyone on board – It’s important that everyone in the household (who’s at least in charge of finances) understands the goal of paying off all debt. This makes it easier to stay motivated and everyone will stay on budget.

Write down all debts

Now it’s time to list out all of the debts, minimum due each month, and the interest rate.

You should include:

  • Student loans
  • Credit cards
  • Auto loans
  • Medical bills 
  • Personal loans

Make it as easy as possible to pay off debt

How to choose a debt pay off method

The debt pay off method you choose will help you save money in the long run or stay motivated to pay off more debt. Here’s what I mean.

There are two main methods to paying off debt. The snowball method and the avalanche method.

The avalanche method is paying debt with the highest interest rate. This method saves you the most in interest. 

The snowball method is paying debt with the smallest amounts in order to pay off more loans, therefore keeping you motivated to keep going.

For example, let’s say I have three debts. They look like this.

Debt 1: Credit card with $5,000 balance at 20% APR.

Debt 2: Car loan with $10,000 balance at 2% interest rate.

Debt 3: Student loan with $15,000 balance at 4% interest rate.

Using the avalanche method, I’d pay off debt #1, then debt #3, and then debt #2.

Using the snowball method, I’d pay off debt #1, then debt #2, then debt #3.

My household is currently paying off student loans, and we’ve personally used a mixture of both methods, but primarily use the avalanche method since it’s saving us the most money in the long run.

Recap: Snowball method is paying off debts from smallest to largest, and the avalanche method is paying off debts with the highest interest rate first.

Read this: 7 Step Guid To Paying Off Credit Card Debt Fast


If my household earned $8,000 a month and our living expenses and retirement contributions are $5,000 a month, and I already had 3-6 months of living expenses in an emergency fund, I would pay $3,000 to debt. I would pay it off using the avalanche method because I typically prefer paying off high interest debt first to save the most money in the long run.

However, someone who has trouble paying off debt and loves seeing quick wins along the way should consider using the snowball method. It’s really satisfying seeing loans paid off, so the snowball method is a great idea for those struggling to stay motivated.

Figure out how much you can pay off in on year

How much debt do you have? How much money do you make in one year?

Write these numbers down.

If you’re budgeting already, skip this step. If not, it’s time to create a budget. This is because once you know how much money you’re spending, you can figure out how much money you can allocate to debt.

There are a plethora of ways to budget, but my favorite is using the EveryDollar app. You can also use a budget planner or budget excel sheet. There’s also a budget planner in my free resource library.

If you’ve never budgeted before, just pick one right away and you’ll soon figure out if it’s the budgeting method for you. Once you know which method you like, make it a regular habit to check in with your budget. I used to hate budgeting and now I check my budget every three days.

Things to do to cut expenses to save more money

Fox business shared an article recently that said the average person spends about $57,600 over 60 years for their cell phone plan. That number doesn’t include buying new cell phones, extra equipment, etc. I tested out a Tello Mobile phone that cost me $19 per month (total). Tello’s mission is to eliminate overpriced wireless plans. They have NO contract or fees, flexible plans starting at $5 to $39, and unlimited text in any plan.

Use Ibotta. Ibotta is a free app that gives you cash back shopping online and in-store. The average Ibotta user earns $150 a year just for doing their regular shopping.

Raise your deductible. I raised my deductible by a few hundred dollars for my dogs pet insurance and we are saving about $10 a month. Since we raised the deductible, we put in extra money in our emergency fund just to be safe. Talk to your insurance agent about how much money you can save if you raise your insurance deductible.

Maximize insurance discounts. Most insurance companies will give discounts for clean driving records, putting a beacon on your car to monitor your driving, and combining insurance policies. Talk to your insurance agent to find out how you can save more money. I save about $100 a year just for installing a State Farm beacon on my car.

Buy items that are reusable so you only have to buy them once. For example, you can buy reusable baking mats, menstrual cups, safety razors, and paper towels. I even DIY my paper towels by cutting up old bath towels we no longer use. We use the DIY paper towels, throw them in the laundry, clean them, and reuse them as paper towels again. 

Keep maintenance regular on your home and car. Doing this makes sure you’re limiting the number of things that break down and need repairs. Since we have a house, we follow a monthly home maintenance plan that checks over certain things around the house each month of the year. For example, every month we clean the garbage disposal, test smoke detectors, and deep clean our oven. A couple of times a year, we check for exterior damage, check the roof, trim trees, and many other things. 

Talk to Billshark about negotiating your monthly expenses. Billshark can lower internet, cable, TV, satellite radio, and many other bills. Billshark lowered my internet and cell phone bill and saved me $290 in one year. You can also try to negotiate your bills on your own without Billshark, but I’ve personally had no luck doing that.

Use Honey. You can stop searching for coupons because Honey finds the best coupon for you automatically. Honey is a browser extension that you download once. Any time you go shopping online, Honey will automatically give you the best coupon for your purchase. If you’re not using Honey, you’re leaving money on the table.

Cancel subscriptions. Billshark can help you cancel and manage subscriptions. You may even score some cash for unused subscriptions. 

Meal plan. When you don’t have a meal plan in place, you make last minute convenient decisions that tend to cost more. Use a meal planner (they’re free in my free printable library) or an affordable meal planning service like $5 Meal Plan. $5 Meal Plan sends you a meal plan and shopping list every week for just $5 a month. Get a 2-week free trial of $5 Meal Plan here.

Use Ebates. Ebates gives you cash back for shopping online on thousands of sites. Sites include: Amazon, Best Buy, Ulta, Macy’s, eBay, Target, Kohl’s, and so many others. Any time you make an online purchase, you get a percentage back with Ebates. Get $20 when you sign up for Ebates here.

Read this: How To Save $1,000 On Your Cell Phone Bill In 1 Year

How to make more money to pay off more debt

Once you’ve done everything you can to save money and cut expenses, now you can think about earning more money. You don’t need to get a second job, but you may want to consider a side hustle. Side hustles are great for creating multiple income streams, earning a lot of money in a short period of time, and diversifying your skills.

Here’s a list of ways to make money with a side hustle:

Read this: How I’ve Made Over $250,000 With Side Hustles

Extra things to do to pay off debt quicker

Put any extra money toward debt – Any extra money you get, this includes tax return money, gifts, work bonuses, etc., put forward your debt.

Negotiate interest rates if possible – Credit card interest rates are usually insanely high, usually 20%+. Lowering the interest rate can save you hundreds of dollars depending on how much credit card debt you have. You can lower your credit card interest rate with this script here.

Ask for a raise at work – Asking for a raise isn’t easy, but the worst that can happen is your boss says no. Besides negotiating your salary, you can also ask for an end of year bonus, more paid vacation time, education stipends to further skills, telecommuting options, stock options, and health insurance. Anything helps.

Read this: 20 Ways You’re Wasting Money – Save $2,350 With These Tips

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