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How To Pay Off Debt By Borrowing From Yourself

How To Pay Off Debt By Borrowing From Yourself

Paying off debt can feel overwhelming. The interest charges keep piling up, and it can seem like you’re just treading water every month without making any real progress. But what if you could borrow money from your future self to get ahead of the game and pay down your debt faster? It may sound counterintuitive, but there are a few smart strategies that allow you to essentially borrow from your future earnings to accelerate debt repayment now.

Redirect Future Income to Pay Off Debt Faster

One of the simplest ways to “borrow” from your future self is to temporarily redirect some of your future income towards debt repayment now. For example, if you expect to get a tax refund in a few months, you could adjust your W-4 allowances to decrease your refund and increase your take-home pay. Then, take that extra money each month and make an extra debt payment. It’s like you’re borrowing your tax refund early to pay down debt faster.

You can do something similar if you have any other lump sums coming your way soon – a work bonus, freelance income, cash gifts for a birthday or holiday, etc. Adjust your withholding or savings deposits so more money comes home in your regular paycheck. Use the extra to make accelerated debt payments now, before that bonus or gift money even hits your account.

Leverage a 0% Credit Card Balance Transfer

Another way to “borrow” from your future self is to transfer existing credit card balances to a card with a 0% introductory APR. This gives you a 12-18 month reprieve from interest charges so every dollar goes straight to paying down principal. It’s like you’re borrowing from your future (post-intro APR) self who will no longer have to pay interest. This strategy allows you to pay off debt much faster during the intro period.

Just be sure to have a plan to pay off the full balance before the 0% rate expires. The last thing you want is for the interest to kick back in just as you’re nearing the finish line. Make payments large enough so you’re on track to be debt-free by month 18 (or whatever your card’s intro period is).

Borrow Against Your Home Equity

If you’re a homeowner, borrowing against your home equity can give you access to large sums of low-interest financing to pay off pricier debts like credit cards. This allows you to consolidate debts into one manageable payment at a much lower interest rate. You’re essentially borrowing from your future self who gets to keep more money each month rather than losing it to high interest.

Just be careful only to borrow what you can comfortably afford to repay on a 15-year term. Never put your home at risk just to pay off unsecured debts a bit faster. But used wisely, a home equity loan or line of credit can save you thousands in interest and help you pay off debt years faster.

Christine Twomey
Christine Twomey
Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.
Brendan huisman
Brendan huisman
Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!
Guerline Menard
Guerline Menard
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
Keisha Parris
Keisha Parris
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
Loveth Okpedo
Loveth Okpedo
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Bee L
Bee L
Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.
divesh patel
divesh patel
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

Refinance Student Loans

Student loan refinancing also allows you to “borrow” from your future self. By refinancing federal or private student loans to a lower interest rate, you keep more of your payment going to pay down principal each month rather than interest. You can often shave 0.5-2% off your rate by refinancing, which can accelerate your payoff timeline by years.

Just know that when you refinance federal loans, you lose access to income-driven repayment and forgiveness programs. Do the math to determine if you’ll still come out ahead and if refinancing aligns with your overall financial goals.

Take Out a Personal Loan

Personal loans allow you to consolidate and pay off credit card balances at a lower interest rate, helping you get out of debt faster. You can “borrow” from your future self who gets to keep more money each month rather than losing it to high credit card interest rates.

The key is to pay off the cards in full so you’re not tempted to continue charging. Commit to closing accounts if needed. Personal loan rates will likely be under 10%, versus credit card rates of 15% or more. Just be sure you have a plan to pay off the personal loan in 3-5 years.

Adjust Your Tax Withholding

As mentioned earlier, adjusting your tax withholding is a simple way to put more money to work for you now. If you usually get a large refund, have less withheld from each paycheck. The extra money can then be applied to debt each month. You’re essentially borrowing from your future tax refund.

Just be careful not to under-withhold too much. You don’t want to end up owing taxes and penalties next April. Aim to withhold just enough so you break even or get a small refund. The rest can be redirected to debt repayment throughout the year.

Save Less for Retirement Temporarily

If you participate in a 401(k) or other workplace retirement plan, you may be able to reduce your contributions temporarily and redirect that money towards debt repayment. Say you put 10% of your income into your 401(k) – you could reduce that to 6% for a couple years and use the extra 4% to pay off debt faster.

This is essentially borrowing from your future retired self. Just be sure to ramp the 401(k) savings back up once the debt is paid off. And avoid taking loans or early withdrawals which incur fees and taxes.

Pause College Savings

Similarly, if you’re saving for your child’s college education, consider diverting a portion of that money to debt repayment for a short time. Maybe aim to save 10% less and apply the difference to your highest-interest debt. Once that debt is paid off, resume college saving at your previous level.

Your child can always borrow for college down the road via student loans if needed. But it’s critical to pay off your own high-interest debts before retirement. A short pause in college saving can help you make faster progress.

Save Less for a Major Purchase

If you’ve been saving up to buy a house, make a major home improvement, or purchase another large item, temporarily reducing those savings can free up cash to knock out debt. Say you’ve been saving $500 a month for a down payment – you could reduce that to $200 and put the extra $300 towards debt.

You’re essentially borrowing from your future homeowner self. Once the debt is paid off, resume your full saving rate. Slowing down your savings for a short period can help you pay off debt faster.

Pick Up a Side Gig

Starting a side gig is another way to “borrow” extra money from your future self. Use earnings from freelance work, driving for a rideshare service, or other side jobs to make extra debt payments each month. Future you will be thankful when those debts are paid off faster.

Even earning an extra $200-500 a month from a side gig can make a big dent. And since side income is separate from your regular paycheck, it’s an easy way to earmark extra cash for debt repayment. Now is a great time to start monetizing a hobby or skill.

Sell Unneeded Items

Take a look around your house for any unused items you can sell, like old electronics, furniture, designer bags or clothes, sports gear, etc. Use sites like eBay, Poshmark, Facebook Marketplace and Craigslist to get cash for items taking up space. Future minimalist you will thank you.

Use all proceeds from selling unused stuff to make extra debt payments. Not only will you pay down debt faster, but you’ll declutter your life in the process. Double win.

Find Room in Your Budget

Analyze your monthly spending to find any areas where you can cut back, even temporarily, to direct more cash flow towards debt repayment. Can you downgrade your cable package, eat out less, pause the gym membership, or reduce any other discretionary spending?

Even small cuts of $20-50 a month add up. Use a budget app to identify potential savings you can redirect towards debts. Future debt-free you will appreciate all those minor sacrifices.

Negotiate Lower Interest Rates

Call each of your creditors and request a lower interest rate. You’d be surprised how often this works, allowing you to save money each month. You can also ask creditors to waive late fees or over-limit fees to further reduce your monthly costs.

Lower interest and fewer fees help more of your payment go to principal each month. Never hurts to ask! Future you will get out of debt faster with less money wasted on interest and fees.

Let Your Employer Help

Some employers offer programs to help employees pay down student loan or other debt. Options range from matching payments, to payroll deductions towards loan servicers, to low-interest refinancing. See if your company offers any perks that could help you pay off debt faster.

Taking advantage of employer programs is an easy way to “borrow” from your future self who gets to keep more of each paycheck after debts are repaid. Don’t leave any free benefits on the table.

Automate Everything

On your journey to pay down debt, automate everything you can. Set up minimum credit card and loan payments to autopay from your checking account. Have a portion of your paycheck direct deposited into a separate savings account earmarked for extra debt payments.

Automation helps build momentum and makes it easier to pay yourself first each month. Future you will reach the debt-free finish line faster when payments happen on autopilot.

Keep Visual Reminders

Keep visual reminders of your debt repayment goals everywhere. Post sticky notes on your bathroom mirror, desk, and fridge showing total owed, monthly payments, and your end date. Make your screensaver an image of a debt thermometer showing your progress.

Visuals help reinforce your commitment and remind you to stay focused. Watching balances decrease month after month keeps you motivated. Your debt-free future self will thank you.

Celebrate Small Milestones

Paying off debt is a marathon, not a sprint. Celebrate even small milestones along the way like paying off your smallest debt, making it through a 0% intro APR period, or hitting certain dollar amounts paid off.

Give yourself non-financial rewards like a movie night, hike, or spa trip. Celebrating keeps you motivated to stay on track. Your future debt-free self will be popping champagne in no time.


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