These tips to help you get out of debt are all easy to implement, but can all have a big impact on reducing (and eliminating!) your debt.
I’ve spoken before about how much I can’t stand debt. We’ve paid off almost all of our debt besides our truck loan and our goal is to have that paid off by the end of this year, so we’ll be debt-free. I.CAN’T.WAIT! Being in debt to someone has a big impact on your entire life. Your money isn’t yours (because you owe it someone else) and as such, you really don’t have the freedom that you’d have if you were debt-free. But I know that paying off debt (especially if you’re drowning in it) can seem like a daunting, if not impossible task.
It’s not impossible! We’ve paid off almost all of our debt, and our goal is to have our final debt (what’s left of our truck loan) paid off by the end of this year. We’re not super high-income earners, we have a baby and a dog to provide for, and we don’t have mega-rich family members who can “lend a hand.”
Instead, we got smart with our time and our money. We started with baby steps and snowballed from there.
Here are 5 things to do right now to help pay off your debt.
5 Tips To Help You Eliminate Debt
1. Write down EVERYONE you owe money to
To really get a handle on your finances and get out of debt, you need to work out every single person you owe money to.
Start by joining Credit Sesame (totally free, no credit card or anything required) which will tell you all of the major places you owe money and suggest a credit strategy to help you save money.
Then, write down everyone else you owe money to that wouldn’t appear on your credit rating (i.e. $100 to Aunt Joan, $250 to your older brother, etc.)
2. Make more money
One of the best ways to get out of debt is to make more money. Not only will making more money allow you pay off your debt faster, but it will also give you some breathing room so if an unexpected expense comes up, you won’t have to charge it to your credit card.
The key to this is that the extra money you make (and trust me, it’s entirely possible to make extra money from the comfort of your home!) should be put straight towards any debt you have or used to build up an emergency fund.
So, how can you make extra money?
There’s the obvious answer of getting a part-time job, but for a variety of reasons, that’s not always a realistic option.
Here are my favorite ways to make extra money:
- Do online surveys
- Get cash back for all your purchases
For cash back on your groceries, absolutely join Ibotta (join here and get a bonus $10)
- Sell your old clothes on ThredUP
- Sell your used books (I do this all the time with books I’ve finished with.)
3. Try to get a lower interest rate
The interest rate on credit cards can be astronomical, and don’t even get me started on payday loans – it’s highway robbery. The good news is, it is possible to negotiate a lower interest rate on your loans, which has the potential of saving a lot of money.
If you have a mortgage, then check out this handy tool that will show you how much money you could save by refinancing your mortgage.
4. Pay above the minimum
Making payments above the minimum amount required can have big benefits – even paying as little as $10 extra per month on your credit card can save you money. Although credit card repayment amounts are usually variable, if you’re able to lower your interest rate on a fixed loan (e.g. a car loan), thus making your repayments lower, keep your repayment amount the same – you can save thousands of dollars and shave months of the life of your loan.
5. Don’t buy things you don’t need
Buying things you don’t need is one of the fastest ways to get into debt. Avoid getting further into to debt by thinking carefully about each purchase. Do you really need it, or are you just buying it to “keep up with the Joneses”, because it looks pretty, or because everyone else has one?
And for things you DO need, make sure you always look for cheaper alternatives. That doesn’t mean you have to sacrifice quality, either.
There’s no point in buying a cheaper item of clothing that’s going to fall apart after 2 washes. But it IS possible to save tons of money and get items that are just as great quality as their more expensive counterparts.
An example of this is LuLaRoe leggings. I’m not a huge fan of all the prints (they’re a bit loud for me but if you can pull them off, more power to you!) but I love the softness and the convenience of throwing on a pair of leggings and a cute top.
They’re WAY more than what I’m willing to spend on leggings, though, so I searched to find a cheaper alternative to Lularoe & I found it. (You can read more about that here if you’re interested.)
Wrapping Things Up
I know that being in debt can be scary, frustrating, and maddening. But it’s not impossible to turn your situation around. It won’t happen instantly, but if you immediately start implementing the 5 steps I’ve outlined (which are some of the exact steps I used) then you can start turning your situation around pretty quickly!