51 Tips To Become Debt Free Sooner

A Harvard Business School Graduate recently made headlines for paying off a $90,000 debt load in just 7 months. It’s an amazing accomplishment and shows that it can be done. Maybe you can’t pay off that much debt in that little time, but if you’re willing to make tremendous sacrifices you can also abolish your debt in a fraction of the time as if you’d made regular monthly payments.

This list is to inspire you and make you realize there are avenues towards a debt-free life. Whatever you choose from below all will lead to freedom. A freedom from worries and stress.

The best thing you can do is to bring the interest rate down on your outstanding loans. For example, although I am always current with my credit card payments, I am always scared about default. Just because I see the astronomical interest rate they charge. On average my 4 credit cards bear 21%+ interest on the unpaid balance.

So, if you are not paying your balance in full (not minimum due) every month you are paying that high-interest rate on your outstanding balance. Here’s what you should do.

• Step 1 – Calculate the average interest rate on your loans and total debt you have
• Step 2 – Shop for a personal loan and see if you can get a cheaper loan alternative, as far as the interest rate goes. (example – Let’s say you have $5,000 debt with interest rate 23%) You should shop for $5,000 personal loan with less than 23% interest)
• Step 3 – Do not reveal your credit score to any personal loan lenders till you receive good faith estimates from a few of them to compare.
• Step 4 – Take the loan and pay off all your current lenders. Now you have only one debt with less interest charge. So it’s easier to repay your debt now.

Many consider taking a new loan is actually putting you deeper into a debt hole. But here you are taking on a personal loan to pay off high-interest credit card loans. So, it’s actually the opposite of what many think.

Yes, your credit score will take a hit initially because of a new loan. but immediately in a month or two, your score will start improving as you paid off your previous debts. Over time, if you pay the new lender on time, your score will keep going up.

Monitoring your credit report and score is key to your success. With increasing score, you are supposed to pay a lesser interest rate. Credit Sesame and Credit Karma provide you with your actual credit score based on your TransUnion credit report, free of cost.

1. Have the right attitude – believe “you can”. Don’t let negative thoughts kill your motivation. This is the biggest of ’em all! Believe in yourself that you can be debt free. You may have been in debt forever but, there’s a way out. Millions of people are living debt free. So can be you. Have faith, start planning and execute your plan for long term. One day you’ll be debt free.
2. Make a list of everything you owe, including the interest rate and payment amount. Check if you can get a loan covering your entire debt at a lower interest rate. If you can get one, you will effectively reduce your loan burden with a single action. Also, your multiple debts will become one, which will further boost your credit worthiness. I listed the very best personal loan providers.
3. Don’t add any additional debt to the load you’re already carrying. If you at all get a new debt, the new debt should be to replace existing debt at lower interest rate. An example is getting a debt consolidation loan or a personal loan at a lower interest rate to pay off higher interest credit card debt.
4. Get a second or third job and use the extra income on your debt. This is stretching you to the limit for a short-term to bring long-term happiness and prosperity.
5. Married couples can try to live off one income and use the other to pay off debt. We are married and living off of one income. She doesn’t work. If we can do, you can as well!
6. Temporarily reduce or stop retirement contributions and put the money toward your debt instead. Retirement funds won’t receive as much interest as your loans will incur.
7. Increase your car insurance deductible to save money on your monthly premium. Every small bit helps, right? increase your deductible, to say $2,000, it’ll lower your insurance premium bill every month. The money you saved can now go to pay off your debt sooner.
8. Switch from whole to term life insurance.  Your monthly premiums will decrease.
9. Have a yard or garage sale Sale off stuff that you don’t use any more. Children’s toys, old clothes, utensils that are too many, shoes that you no longer wear. Sale them off in garage sales.
10. Choose your pay off method as per your choice – Debt snowballing method suggests that you target your smallest debt and then gradually move to tackle higher dates (in terms of amount and interest rate on a debt). If you pay off a smaller debt, you get motivated for larger debt, and then to even larger one. But, mathematically it makes sense to pay off the highest interest rate debt first. As you’ll have the costliest debt paid off first, saving you money! Pick the method you’re most comfortable with. 
11. Keep an emergency fund so you don’t have to use your credit cards when something comes up.
12. Pay as much as you can toward one debt each month.
13. If you receive a raise, put the extra toward debt. Work as diligently as you can and always ask for more pay. Unless you ask you won’t know what you are missing. So get out of the fear of being rejected. Have a one-on-one conversation with your manager, explain your recent increase in productivity and ask for a raise. Any additional money can be sued up to pay off debt.
14. Use windfalls, like a bonus, tax refund, or gifts to reduce your balance. Have a direct refund setup to your checking account and from there redirect this money to your debt payoff.
15. Make money from a hobby. Read this awesome article to get ideas. My father is retired but, still earning from his Etsy store, selling crafts.
16. Develop frugal living habits to cut back on your expenses. Remeber the biggest law of frugal living – “Spend less than you earn”!
17. Sell valuable electronics, jewelry, and furniture you’re not using. Find electronics, gadgets, old video games, watches, jewelry, etc. The use Craigslist, eBay, and even your local newspaper classifieds to seel that stuff.
18. Read books on personal finance and paying off debt – borrow them from the library.
19. Follow blogs of people who are actively paying off debt – You’ll need inspiration regularly. To gather money from everywhere and to save on everything, you’ll have to sacrifice a lot of comforts. So, my friend, you’ll need inspiration from others. You need to see real examples of people who faced hardship and came out winners.
20. Start your own debt blog. Chronicle your journey, note down every small success. You can make money from advertisements and build a support network with readers and other bloggers.
21. Don’t miss any payments, and pay dues on time, the late fees will increase your outstanding balance.
22. Live on a budget. Planning your spending puts you in control of your money. You may want to check out our guide to an annual budget.
23. Evaluate your spending habits, reducing where you can. We wrote a post on how to control impulse buying habit, it may help you.
24. Negotiate a settlement on past due accounts and collections. You may be able to pay just 40% to 50% of the balance due. Banks and card issuers offer short-term hardship programs, you may call them up, no harm in checking if you qualify.
25. Transfer high-interest rate balances to a lower interest credit card, but beware of transfer fees and pay as much as you can before the intro rate expires.
26. Use a calculator when you shop so you know when you’ve reached your limit. That way there are no surprises when you get to the register. When in debt, we recommend you stop using a credit card unless you can pay off the entire due balance every month. Else, it will pile up your credit card debt.
27. Shop with cash and only carry as much as you’ve planned to spend. That way it’s impossible to go over the budgeted amount.
28. When you pay off a debt, apply that monthly payment to another debt – Don’t stop once you started there’s no stopping till you become debt free.
29. Write down your debt goals. Share them with a close friend or family member so you’re accountable for them.
30. Cancel your cable or satellite subscription – Cut the TV first, if you have internet you can watch many free channels online. Close any other subscription you might be subscribing to.
31. Celebrate small successes. Paying off 10% of your debt or knocking out a credit card is a cause for celebration. Just recognizing that you’ve made progress can boost your motivation.
32. Fight discouragement. Sometimes you may feel like giving up, but trust me, if you keep working hard the work will pay off.
33. Prepare your meals at home more often. It’s cheaper than eating out.
34. Cut back on leisure spending, like fun, entertainment, clothes, shoes, and electronics.
35. Ditch your smartphone and you can also get rid of the required internet plan.
36. Start a side small business, like landscaping, painting, babysitting, or web design. Here’s all you need to know about starting a home-based small business.
37. Pay more than the minimum. Paying the minimum will make you pay the most interest overall. We would recommend pay in full if you can.
38. Treat your credit cards like loans. Calculate how much it would take to pay them off in three, four, or five years and make that payment.
39. Ask your creditors to lower your interest rate. Lowering your interest rates lets more of your payment go toward the balance instead of finance charges. Mentioning that you get credit card offers with lower interest rates from competitor banks could make a creditor offer you a lower rate to keep you as a customer.
40. Rent out an extra room or turn your garage into an apartment. The rental income can help you pay off your mortgage.
41. If you’re renting, move to a less expensive apartment or home when your lease is up.
42. Reduce your tax withholding if you regularly get a refund, the extra money on your paycheck can help you reduce your debt now rather than at tax time. More interest saved!
43. Buy things from yard sales and resell them on eBay or your own “yard sale”. Some furniture can be spruced up and sold for a higher price. Here’s our guide to garage sale shopping.
44. Offer tutoring services if you’re good in a school subject.
45. Make crafts and sell them on Etsy. My wife is a regular buyer of stuff from Etsy. Recently she bought a pendant made out of used dinner spoon. Nice work of craftsmanship from someone in South Africa.
46. Give music lessons if you have a musical talent. This NYT article talks about growing popularity of online music lessons.
47. Take photographs and sell them. You can earn money each time your photos are downloaded. This article from Lifehack discusses the subject thoroughly.
48. Work overtime at your job. If you’re paid hourly, your boss may let you work a few extra hours to get paid overtime.
49. Teach a class at your local gym or community college.
50. Cash out your stock. Some experts say you shouldn’t tap into retirement to pay off debt, but it could avoid problems down the line. Check with your financial advisor to see the tax impact of liquidating your stock.
51. Get a support system and keep negative people out of it. Who makes You spend more? If possible form a group of like-minded people who are on the same journey as you are.

The truth is there is no one easy way to get out of debt. Nearly everyone who pays their debt uses a variety of methods and strategies. Singly these items may not be that effective. Combine several of them and they will have a big impact on your debt.

This post was written by Eliza Collins, a personal finance writer specializing in savings strategies, alternative income, and debt relief options. You can read more of her articles at the debtsettlement.com blog.

Readers, If this article helps you in any way, do leave a comment below, we appreciate the feedback, all the very best to your struggle against debt!