Last Monday, I published the first part of this post that contains the four unconventional starting points to pay off debt. These are:

  • Get your Lizzard brain under control
  • Get inspired by the debt payment stories of others
  • Tell a family member or a friend about your debt
  • Read three books on personal finance.

Now that we are, I hope beyond the distractions of Black Friday, let’s get on with the rest.

Unconventional and helpful starting points to paying debt you rarely hear about

#5. Brush up on your maths

The other day, someone asked what people believe is the least helpful subject they studied at school on one of the media platforms.

You know what? I couldn’t believe my eyes!  Most people said it was maths.

No wonder so many people make dumb money moves, get in debt, and get broke.

I hope that you are not one of those. But if you believe that maths is useless, I have bad news for you – the probability of you paying off your debt and living debt-free just plummeted to approximately 5 per cent.


Because to pay off your debt and live debt-free, you must remember and compare prices, must be able to calculate percentages, understand interest rates, be able to calculate your monthly cash flow, your spending etc. I am not even getting into understanding compounding.

Trust me on this one – no maths, no money smarts.

#6. Work out whether you can pay off your debt

If I wanted you to like me, I would tell you that anybody can pay off their debt.

I want you to trust me. So, I am telling you that you may not pay off your debt if you maintain your current situation.

How do you know whether you can pay off your debt?

You can find out using The Money Principle formula (remember what I said about brushing up on your maths?) to calculate your debt payment coefficient:

Your DPC = (Annual Pay After-Tax – Annual Survival Budget)/total debt

Here is a guide to how to calculate your DPC.

Just a reminder that:

  • A DPC higher than 0.18 means that you can confidently pay off your debt.
  • A DPC lower than 0.18 means that paying off your debt will be a stretch.

And remember that you are taking a snapshot. It means that if your DPC is lower than 0.18, you can go back to the drawing board and tinker with increasing your income, cutting more off your survival budget (temporary measure) etc.

Your capacity to pay off your debt is not a snapshot; it is the movie of your life.

#7. Select your debt busting weapons

Most people think about budgeting tools when they think about debt busting weapons.

I don’t, and you shouldn’t either. I am talking about developing your long-term debt busting strategy, creating a workable and realistic plan, and sticking with it.

Also, it is counterproductive to view paying off your debt as a destination – it is just a stop on the way to wealth building, and the weapons you select must be appropriate for that.

#8. Liberate money to put on your debt

Mathematically speaking, being in debt means that your spending is higher than your income.

Practically speaking, you don’t have money to start paying off your debt if this were the case.

Hence, one of the first things to do is to flip the situation. In the first instance, you may find that rationalising your spending would yield results. You may not believe me, but even people who think they are good at managing their money waste a lot.

Only after you have made sure that there is no waste in your spending and started paying debt can you refocus on increasing your income.

Helpful tips:

Use the ERR money management strategy to make your money go further

52 Practical Frugal Living Tips You Can Implement Immediately, Save Money, Cut Waste and Still Have Fun

#9. Make debt payment (cautiously) automatic

I would never urge you to automate your money completely. Why?

Because research shows that ‘the pain of paying’ is the thing that stands between us and complete ruin. The pain is not about paying itself – it is a pain we feel when thinking about spending money.

To control our spending, we must allow ourselves time to think about spending and feel the pain.

You know what?

The last thing you need is to feel retched every time you make a debt payment. Or worse, miss a debt payment.

So, automate it. And set the payment well above what covers the interest on the borrowing.

Final words on starting point to pay off your debt

Here are nine starting points to paying debt essential to becoming debt-free, but rarely mentioned by experts. They are:

  1. Get your Lizzard brain under control
  2. Get inspired by the debt payment stories of others
  3. Tell a family member or a friend about your debt
  4. Read three books on personal finance
  5. Brush up your maths
  6. Work out whether you can pay off your debt
  7. Select your debt busting weapons
  8. Liberate money to put on your debt
  9. Make debt payments (cautiously) automatic.

They work – starting with bringing my negativity under control (learning to celebrate my debt), reading and learning, and acting helped us pay off £100,000 of consumer debt. And we have been debt-free, building new investments since February 2013.

For more on the steps to debt freedom, you may wish to check my book ‘Never Bet on Red: How to Pay off Debt and Live Debt Free’ where I set out a detailed road map to guide and urge you forward.

Now that you know where to start paying off your debt, you must go for it with all you have! I am cheering you on.

Photo by Towfiqu barbhuiya on Unsplash