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Percentage Thinking: Your Route to Paying Off Debt Faster

Being in debt sucks. Being in debt really sucks when you look around and see all of the inspirational stories about people who have paid off $100,000+ in less than five years. If you’re starting to feel discouraged because you don’t have a high-paying job, or if you feel like you’re drowning in debt and don’t know how to get out, this post about “how to pay debt off faster with percentage thinking” is for you.

How to Pay Debt Off Faster With Percentage Thinking

This post was written by our talented staff writer, Kimberly Studdard.

The truth is, you don’t need a 6-figure job or the ability to move in with your parents in order to pay off debt. In fact, I was able to pay off $20,000 in three years, even though I was…

  • renting in a higher cost area,
  • had a child, and
  • was making way less than $50,000 a year.

How did my family do it? We used percentage thinking. And here’s how you can pay debt off faster with percentage thinking too!

pay off debt faster with percentage thinking

What is Percentage Thinking?

Percentage thinking is when you try to improve your life by a percentage every day, week, month, or year. This is typically anywhere from one percent to five percent.

It’s a great strategy to use in multiple areas of your life. If you find it hard to change, if you constantly feel unmotivated, or if you tend to self-sabotage, it can work wonders. It’s also helpful if you’re struggling for time, energy, or resources.

Think about it this way.

  • Say you want to run a mile in 8 minutes, and
  • right now you’re running a mile in 15 minutes.

Instead of pushing yourself to run an 8-minute mile in a week (and inevitably giving up when that doesn’t work), you instead think about improving your run time by five percent every week.

This means that:

  • By the end of week 1, you’d plan on cutting your time from 15 minutes to 14 minutes and 15 seconds
  • At the end of week 2, you’d cut your time by another 5%, down to 13 minutes and 32 seconds
  • Week 3: 12 minutes, 52 seconds, etc. etc.

By week 14, you’ll be under the 8 minute mark!

Now, 14 weeks of running and cutting your time can sound long and daunting. But when you think about the progress you’re making, and how you’re sticking to it because you’re “only” trying to improve your running by five percent each week, you’re more likely to stick to the goal and plans.

How Can You Pay Debt Off Faster With Percentage Thinking?

So how can you pay debt off faster with this method?

  • Well, for one, you’re more likely to stick with your debt pay off goals if they don’t feel like a mountain you’ll never climb.
  • And, it’s easier to track progress when you aren’t able to make huge debt payments or feel like you’ve had a setback.

Related: How the Debt Snowball REALLY Works (with Free Debt Snowball Tool!!)

For example, seeing you’ve only paid off $10,000 of a $100,000 balance can discourage you if you’re trying to pay off your debt at a certain time. But think about that. That’s 10% of your debt payoff! That means you’re 10% closer to your goal of being debt free. Thinking about percentages vs. how long you still have to go can not only motivate you but also show you just how far you’ve come.

It reminds me of when I was in school.

You would get to color in the school thermometer poster when you got closer to reaching a goal. For my school, it was the amount of books read. During the times we were filling in that thermometer, kids would read like crazy just to fill in those lines, even kids who hated reading! They were encouraged and motivated to do it because they loved seeing the progress.

But if someone would have told them to just read 100 books, how many do you think would’ve done it? Likely not.

Here are ways to use the percentage thinking method to pay debt off faster.

percentage thinking1) Look At All Areas In Your Life

Where could you improve your budget and life? What can you do to get you one percent closer to paying off all of your debt?

  • Could you ask for a raise?
  • Could you start side hustling a few hours a week?
  • Maybe you could cut out your expensive gym membership and start working out at home.

Looking at all areas of your life, and trying to improve them by just one to five percent can help you find ways to cut your budget and put more money towards debt.

Related: How to Get Promoted 5 Times in 7 Years

2) Don’t Try To Earn And Save More At The Same Time

Once you’ve evaluated all areas in your life, focus on earning more money or saving more money. The reason why you shouldn’t try to do both at the same time is that it can get overwhelming quickly, especially if you try to do too much at one time.

So, say you decide to cut back. You can tell yourself, “I’m going to cut back on my monthly budget by two percent this month”. If your monthly budget normally costs you $4,000 a month, that means you need to cut it down to $3,920 (a difference of $80). That $80 can then go towards debt payments.

If you cut back your budget every month by two percent, you’ll end up paying back hundreds a month, and without the stress of a huge budget overhaul and trying to earn more money!

3) Set Goals Weekly, Monthly, and Yearly

Your percentage improvements don’t have to follow a strict schedule. If you want to improve your debt payoff by one percent a week, that’s fine. If you want to increase that to five percent a month, that’s fine too. Whatever works best for you.

However, it’s important to set weekly, monthly, and yearly goals so you can hold yourself accountable, and stay focused. For example, if you want to improve your debt payoff by 20% in one year, that’s around two percent a month or half a percent every week. It sounds so much easier to pay off debt when you only have to pay off half a percent each week!

Related: 10 Extreme Tips to Cut Your Spending in Half

Will You Commit to Pay Off Debt Faster With Percentage Thinking?

In order to pay debt off faster, you have to choose what’s is right for you. If you get easily discouraged with the debt snowball or debt avalanche methods, try approaching your debt payoff journey the percentage thinking way!

So what about you? Will you use the percentage thinking method? Tell us in the comments below!!

Battle of the Mind Get Out of Debt

AUTHOR Kimberly Studdard

Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.


  1. I think the percentage is right for me. it is exactly what I am doing and I never thought it is so helpful. I promise to stick to this.

    • Glad to hear it! Keep those percentages going!!

  2. Each month when I get my mortgage statement I calculate how much has been paid. As of 4/1/19 my mortgage is 75.3% paid. It feels good every month when the % goes up. When I get over 90% paid I hope to pay the balance in full.

  3. I really like this idea, Derek. This is a great strategy in reaching your goals. I think the key to this strategy is staying focus. More like slow but sure.

    • Yeah yeah! Staying focused and keeping it simple is key.

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