I used to have credit card debt.

Even though I was a personal banker at the time, it took me forever to pay off my credit card debt. One reason was the simple fact that I barely earned enough money to survive. Another reason is a culprit that hurt me for a few more years:

Lack of a debt payoff plan.

As a personal banker, I got really good at helping other people plot out plans to achieve their financial goals. But somehow there was a disconnect in my own life. Why didn’t I take my own advice?

It wasn’t until years later when I started working at a finance startup, that I realized that the thing I was missing was a plan. I could keep making payments but until I really knew what I had in front of me, I wasn’t going to make any progress.

I finally did pay off my credit card debt (thanks to a plan and laser focus) and am currently tackling my student loans. If you want to avoid making the same mistakes I did, then it’s all about making that plan. Here’s how you can create a bill payment schedule that will help you erase your debt.

Create a Bill Payment Calendar to Help with Debt Payoff

Figure Out How Much You Owe – And How Much You’ll Pay

The first step in creating a bill payment schedule to erase debt is to gather information. Until you know what you owe and to whom, you won’t have a clear picture of what you’re dealing with.

Start off by making a list of all the debt accounts you have. Include in that list your minimum payment, the interest rate, and your current balance.

After you have a list of your debt accounts, then you can start playing with a debt management calculator to understand how much interest you’d pay in the end if you kept up a minimum payment only pace. This is a great motivation for the next steps (and ended up being a huge wake-up call for me when I had credit card debt).

Determine How Much Extra You Can Apply to Your Debt

If you have any extra money to apply to your debt at all, do it. If your budget seems too tight, take another look to be absolutely sure. (If you need professional assistance with your budget, The San Diego Financial Literacy Center can help.)

When you create your budget and it’s either in the negative at the end of the month or it breaks even, then the next step is to see what you can cut or how you can earn extra money (or both).

I’m on a pretty bare-bones budget myself, so it’s not always easy to cut items from it. However, when I evaluate my budget more closely, I can usually find ways to reduce the frequency of certain items. If your budget seems too tight for modifications, see if there are any items that you can use less or that you can reduce the cost by finding other services at a lesser price.

As far as earning extra money goes, this was an important component for me to paying my debt off more quickly. If you’re in a position to search for higher-paying jobs or to aim for an internal promotion, make that one of your top priorities. If you’re already at the ceiling for what you can earn at your day job right now, look into what you can do to earn extra money outside of work. Maybe it’s taking on some part-time work like retail or serving or maybe there’s something you can do from home (such as working as a virtual assistant or doing data entry).

In an already over-scheduled world, I know I’m making a big ask when I suggest finding ways to earn extra money. However, the impact it can have on your overall debt payoff might be worth the extra effort (since debt brings with it some hefty stress itself). And always remember: every little bit helps!

List Your Targets

Now that your groundwork is complete, the next step in finalizing your new bill payment schedule is listing your accounts in order of how you want to target them.

Targeting accounts is often referred to as “debt stacking” and there are two ways to do it:

• “debt snowball”
• “debt avalanche”

The debt snowball method is to target the lowest balance debt accounts first. The idea behind this is to find motivation in reducing your amount of debt accounts quickly.

The debt avalanche method is to target the highest interest rate debt accounts first. The idea behind this is that it’s often the fastest way to pay off debt overall.

There are a lot of opinions about which of these debt stacking methods is best, but honestly, the only best method is the one you’re going to stick to. Choose one and stick with it – nothing is more important than that.

Create Your New Bill Payment Schedule to Erase Your Debt

Now that you have your targeted list, it’s time to complete your new bill payment schedule. Here’s how to do it:

1. List your accounts in order of how you want to target them, first to last.
2. Write out the minimum payments for each.
3. Add up the total: that’s your minimum monthly debt payment amount.
4. Now write down the extra amount of money you can apply towards your debt each month (if any).
5. Add the totals from 3 and 4: that’s your new monthly debt payment amount. You will continue to pay that amount until you’re debt-free, regardless of the minimum payments that show up on your credit card statements.*
6. Look at your targeted list: what’s your minimum payment on the first target account? Add a total of 4 to the minimum payment on your target account: that’s your target account’s new minimum payment.
7. As soon as one target account is paid off, roll over everything you were paying on that (the minimum and the total from 4) to your new target account. Continue to do this on every target account until you’re debt-free.

*Don’t stray from these new minimum payments (unless for some reason your minimums on your bills increase).

Here’s another way to look at it: if you owe $400 on your debt each month and have another $100 to apply to it, then you’re now deciding that you “owe” $500 per month. No matter how many accounts get paid off, you’ll continue to pay that $500 until you’re debt-free.

I applied this principle to my own debt payoff and it shaved months off my original debt repayment time. The real beauty of this plan isn’t just the momentum it creates – it’s also the fact that you can potentially pay your debt off faster even if you can’t make more than your original minimum payments today. Because once you get that first target paid off, you instantly have extra money to put towards your new target account.

Remember: every little bit helps! Work with this bill payment schedule and you’ll get the momentum you’ve been needing all along.