Debt is an unfun topic to talk about.
Not with yourself, or with your grandma, or with the next-door neighbor. And the thing is, most of us have some form of debt.
If there was a show of hands for people who were completely debt free, I’m sure we’d just hear crickets chirping
It’s never an easy thing to see debt piling up month after month while the bills don’t stop.
That’s why it’s great to actively find ways to reduce it as much as possible and as fast as possible.
So to help you tackle your debt canceling journey, here are 15 tips to give you a leg up and help you get out of debt faster.
How To Get Out Of Debt Fast: 17 Habits To Start Right Now
Change your financial target
I sometimes miss the mark on my own goals because I don’t have a visual of where I want to get and when.
It’s kind of like aimlessly driving around trying to get to the beach without a GPS.
Getting a clear vision of where you want your finances to be three or six months from now will help you map out an actionable way to get there.
If your target is simply to meet your bill needs for the month then that’s where you will land.
If your target is to make a little extra money to pay over the minimum payment for your cards then you’re actually making strides and THAT’S where you will land.
Changing your financial target helps you change your mindset.
ASK for lower interest rates
You don’t get what you don’t ask for.
It’s a popular saying that also applies to your credit cards.
It might be nerve-wracking at first, but it’s good practice to call your credit card company and try to negotiate a lower interest rate.
Many people haggle on not only their bills but their credit card payments and they actually manage to get lower rates.
Here’s a guide on how to get started asking for a lower interest rate that will help put you on track to be debt free.
Create money out of what you have
Chances are, you have a ton of things at home lying around that could be turned into cash.
The trick is to actually take the initiative to do so.
When I moved across the country, I knew I was going to need as much cash as possible. I also knew that I needed to carry less stuff with me.
Long story short I took the time to take a few pictures, list them on Craigslist and made a couple hundred dollars that were designated as gas money.
You can do the same with your ‘stuff.’
For instance, with Decluttr, you can easily sell your old DVD’s, phones, or old electronics lying around.
Or with ThredUp, you can sell the clothes you don’t use (they’ll even send you a prepaid bag to send your clothes in).
Sell on eBay, Offer Up, Bonanza, Craigslist…the list goes on. But the point is to make use of your resources as best as possible.
As an extra perk, you’ll feel so much lighter after letting go of things you simply don’t use.
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Create a frugal budget
Image Source: shop.carrieelle.com
You might already have a budget in place, but does it have an allowance for debt cancellation included?
If you can’t afford to add another subsection to your budget, audit it and look for the things you can cut out.
AKA doing some lean budgeting and putting it on a diet.
Maybe there’s fun money you can designate to debt payback? Maybe you can downgrade for a cheaper phone plan for the time being?
Or maybe you need to revise the spending you do on your groceries.
Side Note: I wrote a mega post on ways to cut your grocery bill in half you should check out for more money saving ideas.
You need a side hustle (you can do from home)
Next you need to pick up a side hustle. While this can mean a part-time waitressing job, or picking up extra hours somewhere, it can also mean working online from home.
It wasn’t too long ago that I recently started side hustling, and I saw that I’d be left with more wiggle money to designate to extra expenses, savings, and debt paydown.
Adopting a side hustle on your free time works, but only if you do the work first.
To help you get serious about starting a lucrative side hustle, here are some posts I put together on the subject:
Cut out emotional spending
I get a feeling this one is a big one for many of us (I know for sure it is still a work in progress for me).
Hands down, emotional spending will only dig you deeper into debt, no matter how you cut it, and there isn’t one beneficial thing that comes out of it (I seriously can’t think of one).
We often do it because we think it’ll help us feel better, or because it was just a spur of the moment decision we didn’t think enough about.
Some ways to help you cut out emotional spending for good are:
- Making a list (and stick to it) of only the things you need before you go out and buy them
- Taking less last-minute trips to the store
- Sleeping on it. Don’t make a hefty purchase until you’ve given yourself enough time to think it through.
- Even meditating can help
Finding alternative hobbies
So you’re on your debt repay journey. This means you might need to forgo your money guzzling hobbies (memberships also apply here).
This can mean going out to eat less often (or get used to going out to eat with Groupon deals ), canceling some magazine memberships, or working out at your local park instead of at the gym.
All while you redirect that money towards your credit card payments and make financial progress.
Draw a real timeline
Hands down, writing down your goals works (pasting them on your bedroom mirror is a plus).
Drawing a repayment timeline with an end date can be a huge motivator in helping you achieve that goal.
It almost works as a visual roadmap as you take it one repayment milestone at a time.
It’s always good to revisit that timeline often and see where you can adjust if you happen to miss a payment, or you were able to make an extra contribution towards your debt you weren’t expecting.
Look into refinancing
Refinancing, if you have multiple sources of debt, can help, though it isn’t always the best option for everyone.
This is especially true for student loans, which are a huge financial burden for recent college grads.
Not too long ago I found a guide on what debt refinancing options out there are for student loans, and if they would work for you.
Here’s the guide if you think you’d like to look more into it.
Extra Note: I also recently came across Tally, a free downloadable app that can make your debt refinancing easier if you qualify for it. It just takes a few simple steps to set up and see if you qualify.
After that you’ll make one payment that goes to your consolidated credit card debt.
Hoard excess cash towards your debt
Any and all cash you can add towards your debt is and should be welcome.
It’s like trying to put out a fire, you want to throw any water at it you can find.
This is true even if it means turning in your loose change and turning it into cash (or selling your old things).
Use the snowball method
You might have already heard about the snowball debt pay, which is one effective way to pay off debt.
If you haven’t, this is how it works:
You pay the smallest amount you owe first, while making the minimum payment on the biggest amount at the same time. You gradually work your way up to the bigger amounts until you end up paying off your biggest debt last.
It’s like burning a candle at both ends. And most importantly, paying off smaller debt gives you a quicker win that keeps you motivated.
Not to mention research shows paying smaller debts first helps you get out of debt faster.
This is just one of many ways to approach it, but it can work for you if you have several credit cards and amounts owed to different sources.
Look into balance transferring
Some 0% initial APR credit cards allow you to transfer balances on to them. This might be an option if you’re credit is high enough to qualify.
NerdWallet has a great comparison post on the best 0% APR credit cards that accept balance transfers.
Focus is a huge part of the puzzle that will obviously help make your debt repayment a success.
Focusing will help make your debt repayment go faster.And speed is definitely an asset when it comes to paying off high-interest rates.
The more times you can make the right decisions, say ‘no’, and stay focused on your goal, the better the outcome. Striving to stay focused can only work for you, and not against you.
Anticipate year-round income
We often forget about the bonuses and the tax returns that we can either designate to paying off large chunks of debt at a time, or to use as a buffer to pay off bills while we redirect finances from elsewhere into our debt.
Anticipating your tax returns and working it into your repayment budget can help with the repayment load and plan ahead with a long-term strategy.
Cut your wants in half (or further) for now
Wants are exactly that, just wants. You don’t need them to survive, and honestly some you can simply do without anyway.
If you sat down and audited all the ‘wants’ you got for a week I’m sure you’d see where a lot of your money was unnecessarily being spent.
Cutting your wants in half can help you redirect a good chunk of money towards your debt repayment. Try it out and see.
Plan for alternatives in the future
Paying down debt doesn’t mean you’ll never be faced with a situation in the future where you might need to borrow funds.
We often go to the worst sources, like credit cards, because it’s what we know about. But there are better alternatives to finance big purchases or unexpected needs.
It’s a good idea to create better mindsets for future money solutions, practice more mindful spending, and be more aware of the resources that are out there.
For example, there are peer-to-peer online lending institutions, like Lending Club, that can lend you money with a much lower fixed interest rates and easier management.
It’s all about being resourceful and being smart about not repeating the same financial mistakes of the past.
Ditching life-sucking financial habits now
Hands down, bad money habits can keep you broke til the day you call it quits.
That’s why it’s important to catch them early and correct them.
Good habits and bad habits can mark the difference in where your future financial self will be. And sometimes it takes a lot of repetition to work out that financial muscle we all have.
There you have it. Hopefully, these tips get your wheels spinning on your way to no debt.
Any debt canceling financial tips I missed out on? I’m always ready to hear it below.