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Are you struggling to get out of debt?
If so, know you’re not alone, and there is hope.
80% of Americans have consumer debt, 1 in 3 familes have a written budget with almost half of American families living paycheck to paycheck.
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Millions of people are in the same situation around the world. We spent a lot of time and used many strategies to get out of debt ourselves!
This article will discuss 11 strategies that can help you get out of debt fast!
Table of Contents
1) Know Where Your Money Comes and Goes
The first step to getting out of debt is building awareness of your money and creating a budget. You need to know how much you are bringing in and how much you are spending.
Once you have a good understanding of your finances, you can start making changes to your spending habits.
How To Start This Strategy: Start by creating a budget. You can use a simple spreadsheet or an online budgeting tool.
Once you have your budget, start tracking your spending.
Make sure to include all your expenses, including credit card payments, groceries, and gas.
Why This Works: This strategy works because it gives you a good understanding of your finances.
Once you know where your money is going, you can start changing your spending habits.
2) Cut Down on Expenses
Once you have a budget, it’s time to start cutting expenses. These first two pay-off debt strategies are crucial.
Look for ways to reduce your monthly expenses. You may need to make some lifestyle changes, but it will be well worth it.
How To Start This Strategy: Start by evaluating your monthly expenses.
Where can you cut back?
Are there any unnecessary expenses that you can eliminate?
Once you have identified areas where you can cut back, start changing your spending habits.
Why This Works: This strategy works because it allows you to save money each month.
The more money you can save, the faster you can get out of debt and avoid more consumer debt.
3) Increase Your Income
If you want to get out of debt fast, you must find ways to increase your income.
If you can’t find a way to increase your income, you may need to consider finding a new job or starting a side hustle.
How To Start This Strategy: If you’re looking for a new job, start by evaluating your skills and experience.
What are you good at?
What do you enjoy doing?
Once you understand your strengths, start searching for jobs that match your skill set.
You can also increase your income by creating passive income-producing assets.
This can include starting a blog, an online business, or investing in dividend-paying stocks.
Why This Works: This strategy allows you to bring in more monthly money. The more money you have coming in, the faster you can pay off debt.
4) Make More Than the Minimum Payment
If you only make the minimum payment on your debts, they will take forever.
It would be best if you started making more than the minimum payment to get out of debt quickly.
How To Start This Strategy: Start by evaluating your monthly expenses.
How much can you afford to put toward your debt each month?
Once you understand your finances, start making more than the minimum payment on your debts.
Why This Works: This strategy allows you to pay off your debt faster and save money on interest.
The more money you can put towards your debt each month, the quicker you will be able to get out of debt.
By paying down the principal balance, you are effectively paying less interest each month.
6) Snowball Your Debt Payments
One of the best ways to get out of debt is to snowball your debt payments.
Start by listing out all of your debts from smallest to largest, and focus on paying off the smallest debt first.
Once you have paid off the smallest debt, you move on to the next one, and so on. This creates a momentum effect and can help keep you motivated!
We used this method to pay off $56,000 in student loan debt. For more on this story, visit The Debt Snowball – How We Paid Off $56,000 In Student Loans.
Why This Works: This strategy allows you to focus on one debt at a time.
Focusing on one debt makes you more likely to pay it off successfully.
You’ll put all your extra money towards the debt until it is paid off.
Once you have paid off a debt, you will have more money available for the next one.
6) Attack Your Highest Interest Rate Debt First
Another popular strategy for getting out of debt is to attack your highest interest-rate debt first, otherwise known as the Debt Avalanche Method.
This will save you money in the long run because you will be paying less in interest, and is a good option when you have debt with high-interest rates.
Why This Works: This get-out-of-debt strategy works because it allows you to save money in the long run.
The less interest you pay, the more you will have to put toward your monthly debt.
Doing so can help you pay off your debt more quickly.
7) Refinance Your Debt
If you have high-interest debt, you may be able to save money by refinancing your debt.
You can take out a new loan with a lower interest rate and use the money to pay off your high-interest debt.
Why This Works: This strategy works because it allows you to save money on interest.
When you refinance your debt, you will have a lower interest rate, which means you will pay less monthly interest.
Ultimately this will help with your monthly cash flow.
8) Stop Adding More Debt
If you want to get out of debt, you need to stop adding more debt.
Stop using high-interest credit cards and taking out loans.
You need to live within your means and only spend the money that you have.
Why This Works: This strategy allows you to focus on paying off your existing debt.
When you stop adding more debt, you can focus on paying down the debt that you already have.
Eliminate your financial troubles sooner by starting to use this method today!
9) Use a Debt Settlement Program
If you are struggling to make your monthly payments, you may be able to use a debt settlement program.
This option can help you reduce and get out of debt quickly.
Why This Works: This method works because it can help you reduce your debt.
When you use a debt settlement program, you will negotiate with your creditors to lower your interest rates and monthly payments.
Doing this can help you get out of debt fast.
10) Sell Unused Items
If you have items that you no longer use, you can sell them and use the money to pay off your debt.
Selling unused items is a great way to eliminate clutter and make extra money.
You may realize that you have hundreds or even thousands of dollars worth of stuff you no longer need.
Instead of having it collect dust, you can use it to reduce your debt liabilities.
How To Start This Strategy: First, you would want to go through your house and list items you no longer need or use.
Once you have this list, you can start listing these items for sale online or have a garage sale.
You can use your money from selling these items to pay down your debt.
You can easily combine strategy #3 above (increasing income) and this one by renting out your extra space after selling unused items. That’s why we love NEIGHBOR!
An excellent way to increase your PASSIVE income is by renting out extra space! With NEIGHBOR, you can easily rent out extra space, such as your garage, self-storage unit, rooms, etc.
Why This Works: This method works because it allows you to make extra money to put towards your debt.
When you sell unused items, you may receive a lump sum of cash, and you can pay off the principal of your debt with that profit.
11) Switch To A More Affordable Phone Plan
Another one of the pay-off debt strategies is to lower your monthly phone bill, thus allowing you to have more money to pay off debt.
Mint Mobile has helped us save tons of money, especially during college! We all know how phone plans can get pricy with long, frustrating contracts.
Our friends told us about Mint Mobile many years ago. For many reasons, we are still using them today!
Mint Mobile offers amazing plans at incredible prices, with plans as low as only $15 a month! My wife and I pay only $15 monthly for our phone plans. Check out how you can save money with them today!
Get Out Of Debt Strategies Conclusion
If you are struggling with debt, know there are many options available to you!
You just need to find the right one for your situation.
Use these strategies to get out of debt fast. Do not feel discouraged if you cannot pay off your debt overnight.
Just keep working at it and you will eventually get there.
Debt can be a burden and the faster you can get out from under it the better.
The following are eleven pay-off debt strategies that can help you achieve this goal.
By having a financially wise strategy and deploying discipline, you can be debt-free in no time!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
