By Caleb & Mary Beth Lutz · 10/8/26 · pairs with How to Pay Off Debt and Still Have a Life
You don't have to eat rice and beans for three years to get out of debt. Unless you want to, y que bueno si es verdad (apologies to real Spanish speakers if we butchered that).
Most debt advice you hear is some extreme thing you have to do, and a lot of it comes wrapped in shame: cut everything, sell everything, never enjoy anything again. We think there's a better way. This is a written companion to our video on paying down debt while still having a life, and the full episode is below if you'd like to watch us have entirely too much fun with it. Yes, this is probably our goofyest take to-date.
If you'd rather read, we cover three things: know your real numbers, pick a method that keeps you sane, and pull the lever most people forget.
Point 1: Know your real numbers
We know, this sounds like the boring part. Most of the time when someone brings up budgeting or debt, you brace for a droning voice reading off spreadsheets. But knowing your real numbers is actually the first step Out of boredom and anxiety. It becomes a catalyst, and honestly a reassurance, because you finally know where you're starting and what’s possible.
So much of the anxiety around debt comes from Not knowing. People avoid their bank account and their balances because the unknown feels worse than any number could, so they never actually look. The fix is to put it all income, expenses, debt, and financial goals in one place. On a single page, list every debt with its balance, interest rate, and minimum payment. Add up the total, and take a look at your average interest rate across everything. Most people have literally never seen it all in one view, and seeing it is where the action… and eventually the relief… starts. (We built the free Freedom Budget Tracker for exactly this.)
One thing we want to say explicitly (and you’ll need to own): there is no shame in your current debt number. These days it's more common than people think to carry six figures of student loan debt, and when two people marry and combine balances, sometimes multiple six figures. You can't fix what you refuse to look at, so this number is simply the starting line and a financial snapshot in time, not a verdict on your worth. (er… only your net worth lol).
We'll go much deeper on line-by-line budgeting in a future video for those who want it. For now, the whole thing boils down to three simple numbers: what's coming in (income), what must be going out (essential expenses), and everything else, which is really investing in your future, your debt payoff, and yes, some fun money too.
Point 2: Pick a method that keeps you sane
There are a couple of well-proven ways to attack debt, and the point here is for you to choose what actually fits you. There are real experts in this space (Dave Ramsey's Financial Peace material is a great example).
The two most common paths of debt payoff are the snowball and the avalanche.
The snowball method is built for motivation. You list your debts smallest balance to largest, pay only minimum payments across the board, and attack the smallest bill first with all your “extras” pooled, ignoring interest rate. When the smallest bill is paid off, you roll what you were paying (both “extras” and your minimum payment, now a larger amount) into the next smallest bill, then repeat the process as you have the next one paid off, and so on. Each payoff builds momentum. If you need to feel like you're making a difference to keep going on debt payoff, this one is for you.
The avalanche method targets the highest interest rate first. Over time it maths out better, because you stop the most expensive debt from digging you deeper. The tradeoff is that a high-interest debt might also be a big one, so it can take longer to get your first win. But once you clear it, you're much further ahead. Depending on your balances, the difference between the two methods might be small, which is exactly why so many people happily go the snowball route.
Which one is right depends on your situation and goals. Multiple six figures at high interest is a very different battle than a grand or two of credit card debt. The principle underneath both: small wins beat a perfect plan you quit. Go in deciding what "I'm winning" looks like for you.
One vital note: if you have anything predatory, a payday loan or any crazy-high-interest instant loan, attack that first. Left alone, that kind of interest multiplies and puts you far further behind. High-interest credit cards fall in a similar bucket. Knock those out before almost anything else.
Point 3: The lever everyone forgets
Here's the lever most people miss that’s More available Now than ever before in history. There's only so far cutting back can take you. That ceiling is a big reason budgeting and debt payoff get avoided in the first place, because people assume it means losing everything they enjoy.
The simple alternative: Increase your earnings. Make sure you're earning more than enough, so your income clearly exceeds your expenses. Stick with us for a minute, because easier said than done, sure, but this is not as hard as many people assume. The same effort it took to get hired at your main job can go toward adding income on the side. Maybe you're skilled in something and can coach someone in it. Maybe you set appointments in your off hours, drive Uber, or even donate plasma for a few hundred dollars a month. With a few intentional hours a week, an extra $500 a month is very doable, and that changes your payoff math dramatically without you having to cut your life to the bone. (Our income streams videos and the free Income Streams Index are built to help you find the right fit.)
Two VITAL notes here.
First, if you start earning more only to spend more, you’ll soon experience what’s known as “lifestyle creep”. You might even earn yourself a shiny pair of golden handcuffs. Meaning even though you earn “more”, if you spend most or all of that “more”, you’re no better off than when you started. This can easily be a blog/episode of its own.
We have a good friend who worked at a bank for years. As he got to see the accounts of many a sharpshooter driving the luxury cars thru the bank lines, he noticed something that shocked him. MANY of the nicest looking clientele were among the broke-est of their clientele. While they made more, they often were spending more than they made and had built habits of spending that far exceeded their current income. That kind of Rich-broke is almost a harder place to be than Poor-broke because of the debt creep and the steeper fall sure to come.
Second vital note that plays off the first, Discipline is essential, not only to spending less, but also earning more. You can't change nothing and expect the debt to vanish. But if you can widen the gap by intentionally requiring of yourself the work and skill-building to earn more instead of only cutting, your processes and your cashflow become more sustainable.
A personal take: Reward yourself along the way
The more we’ve built careers, communities, businesses, and now starting on our family, the more we value intentional rest and play. We've found that rewarding ourselves for the work we do is a massive motivator. And MUCH more sustainable for long term wins.
So when you stick to your plan for the first month, celebrate it. It doesn't have to be big. A scoop of ice cream will do. The reward isn't only watching the debt drop. It's proving to yourself that you did what you said you'd do, which carries you through any long journey, whether it's debt, paying off a future vacation, or any other goal. Those small rewards don't have to cost much, and they matter more than people expect.
Here's a bonus tip we didn't plan: find ways to have a lot of fun that cost little or nothing. Play a board game or cards with friends, borrow movies from the library instead of stacking up subscriptions, go to the beach, hike a mountain, get outdoors. So much of our culture markets "you deserve this, splurge on yourself" ONLY when rewarding yourself always means spending money on Their products. You can reward yourself smartly, in ways that actually align with your goals.
For those who want to go extreme, that's okay too. When Caleb was paying off his college debt, he limited his expenses hard and ran four income streams at once, one main job and three side hustles, and knocked it out in a couple of years so he could build from zero. That's a valid path if attacking it is what you want.
But if you've never stuck to a budget before, it probably wasn't only a willpower failure. It was usually that the right plan With meaningful motivation to follow thru on the plan was never in place.
The takeaway
You don't have to pause your whole life to get out of debt. To recap: know your real numbers, pick a method that keeps you sane (snowball for motivation, avalanche for math, and kill predatory interest first), and pull the lever most people forget by growing your income and crushing the remaining debt with it. Bonus, reward your follow thru of debt payoff with things that don't cost much, so this becomes a lifestyle you can actually keep.
If you've tried and slipped before, you didn't fail. We've all missed goals we set. Even the highest achievers. What matters is having a plan and a small reward system that fits your life. Why? Because the goal is for this to become sustainable, not miserable.
A couple of resources to help you compound all of this: the free Income Streams Index for income ideas, and our Financial Game Cheat Sheet, a rundown of the wealth-building habits the financially secure use to keep getting ahead, which pairs perfectly with a payoff plan. Both are on the resources page. Grab them and see if they help.
And remember, you always have a choice to change your life. We believe in you. Go get them.
🎯 Start here: theydontteachyou.com/start-here
📩 Get the free Income Streams Index and Financial Game Cheat Sheet: theydontteachyou.com/resources
