Paying off debt-Debt has managed to find its way into the normal life of an average American.
The figures for the credit card, mortgage, and non-mortgage debts, and student loans are frightening. It’s enough reason to wonder whether it’s even possible to actually stay out of debt.
Also, thanks to low-income levels, poor financial management, and other unexpected circumstances, most people rely on debt to scale through each month. They get soaked in depression and worry over how to repay these debts.
If you’re in this category of people whose debt profile is too much for them to face, I need you to know that you can be free from debts faster than you would have imagined.
In this article, I’ll share with you 17 unique ways to get out of debt and be financially free, and very fast too.
Let’s get started.
1. List Your Debt
The first way in paying off debt is by listing your debt. If you want to reclaim your financial freedom from the burden of debt, this is where to begin. Make a list of the bills you’re currently servicing.
Highlight the credit cards, student loan, mortgage, car financing, and every single other.
You’ve got the complete list. Now, you need to prioritize your repayment. From the list, note the period needed to clear off each debt at the front of the line.
So, if you’ve got some of these that only takes a few months or a couple of years to offset, that’s where to begin. Decide that, come what may, these have to be cleared as at when due.
Also, If you have multiple credit cards, tick the ones with the lowest balance as the priority.
One thing you can do to make this easier is to merge monthly repayments, and set your eyes on that as the monthly deductions.
Let’s say you pay a $500 on credit card debt, and $1200 car debt each month, that’s $1, 700 certain deductions you won’t want to tamper with.
2. Set Goals
Many times, you need a goal as a compelling factor to pay off those debts. So, go to your calendar now, and mark specific dates to clear each of the loans.
You can sit, and calculate how this will work before choosing a date. This will put into consideration the whole amount, monthly repayment amount and the number of months required to be cleared.
Of course, it will be helpful to consider paying more in monthly repayments to achieve this faster. But even if that won’t be possible, just set a realistic timeline, one that won’t bring another unnecessary pressure on you.
Then, let the goal have rewards attached to it. That’s a plus to your motivation.
3. Create a Budget.
If you don’t use a budget, while having loads of debt to deal with, you’re missing out on many things.
Until you define a budget, you won’t realize how much you’re spending as unnecessary expenses. So, when the month starts, take out a notepad, and decide what goes into what.
Let a specific amount be tied to each of the clothing, utility bills, food, and pleasure. Don’t just leave this on paper.
Stick to it, as you’ve instructed yourself. When you exhaust a quota, even if it’s Day 2 of the month, you can’t do anything about it.
The only remedy is to remove one of the other items and give it to the exhausted one. And that should only be for core needs, such as food. You’re not allowed to touch the savings or repayment quota.
Excel or any other spreadsheet will be a handy tool to help you through this. You can also check out for some budgeting mobile apps that could be of help.
4. Cut Expenses
While it’s essential to define the budget, it won’t make any difference to spend on things that are not needs at this moment.
It’s more important now than ever to cut expenses and channel every spare income to your goal of debt repayment.
Once this month ends, review your bank statements. It would reveal loopholes and pointless expenses that need to stop.
If you realize that you spend a lot of money on coffee, this may be the perfect time to start making it yourself. The same goes for entertainment. Do most of your movie nights at home.
That frequent night out could turn to game nights or family time, The goal is to replace that money-milking outing with a free (or almost free) alternative.
Then, reducing expenses doesn’t have to end with unnecessary things.
Even on groceries, you should do more to save. Hunt for coupons, get special deals and shop at a low-price supermarket like Walmart.
5. Pay Extra
This is the more reason you should cut-off expenses that don’t bring value. Consider paying more than the required monthly repayment for the debts.
So, when tax refund, cash gifts, and other extra money comes in, or you manage to save some dollars at the end of the month, you should pay more.
Even, if you can afford to pay double the amount, don’t hesitate to do so.
You get two benefits from this. One, the loan will get cleared much faster. Two, the interest rate won’t keep compounding. So, if you want to paying off debt be ready to pay extra.
6. No More Automated Subscriptions
Netflix, gym membership and many more subscriptions are capable of crippling your debt repayment goal if you don’t stop them.
It’s very likely that you don’t use these services as much as you pay. So, what’s the point of $50 monthly fee, when you only visit the gym once a week? This could add up to hundreds of dollars when added to other subscriptions.
You can decide whether you want to watch some specific Netflix movie or do something else, but don’t let anything run on automated debit.
You can do that much later, but right now. it’s a no-no for your debt-free goal.
7. Audit Utility Bills
Is there something you currently pay for, but not using?
To answer that, you may need to do a brief audit of your monthly bills. Check to see if that unlimited internet is what you actually need right now.
How much data did you actually use last month? Imagine what that will save you if you realize it’s not a need at the moment.
Then, there is cable television. The list is long. Just check through all of them, and you’re very likely to find loopholes.
Interestingly, these service providers also have offers going on almost every moment.
So, reaching out to them, or just checking up on their website could get information on a running promotion, and available offers.
8. Stay Off Debt
It’s not advisable to plunge into new debt while still paying these ones. In fact, not even to offset the current debt. It’s not going to help in the long run.
One thing is that you may end up paying much higher than the initial debt. This will definitely hurt your income the more.
Then, beware of promises of cashback credit cards. While you get to pay low interest, it’s a trap to make you remain in debt longer than you would have wanted.
Basically, the idea is not to take any loan at all until this phase is over. Not mortgage, no car loan, or any other one. That will help you concentrate on paying off the current debt as fast as you want.
9. Side Hustle
Your current job limits you to what you can do, and how much you can pay back in repayments. But you can increase the speed of clearing the debt just by getting an extra means of income.
It could be freelancing, or just another job that doesn’t interfere with your current job. That’s like night work or weekend jobs.
Like most people, it’s most likely that you’ll have the skill to sell as well.
So, you can jump on sites like Upwork.com to get yourself some side gigs. You can decide to direct the complete earnings from this to the repayment.
10. Cook Your Foods
I agree that the sumptuous meal at the nearby restaurant is really tempting. But it’s quiet too expensive for your budget.
At this point, it’s a drain in the purse, and you don’t need that. So, instead of going out, cook your food at home, and even pack your lunch along with you while going to work.
Once it’s Sunday, decide on how your meals will be for the week.
With the plan in place, it’s easy to just go ahead and make the foods for each meal. Planning ahead will also ensure you’ve gotten the ingredients in place.
11. Check that Addiction
If you spend $35 a week on coffee, that means you can add $140 to your repayment bill, if you skip it.
Such an addiction, including smoking or alcohol, takes a toll on your finances. You may not notice because it comes in bits of $5 or higher. But when you do the maths, it’s a huge loss.
It’s best to put a stop to smoking and alcohol. For coffee, it doesn’t hurt if you choose to also make that at home. That could save you over $1500 a year.
12. Sell Stuff You Don’t Need.
This is another avenue to make quick cash that can speed-up your loan repayment.
Take a look at the stuff you have. From clothing to books and other things, many of them are still cool, but not useful for you anymore. Why not sell them?
You can easily do this with the aid of consignment shops around you. Alternatively, Facebook Marketplace, eBay, Decluttr and similar apps are out there to help.
13. Negotiate Credit Cards’ Interest
If you’re a loyal customer of a credit card company, it will be unfair to charge you a heavy interest rate on your cards.
So, it’s acceptable that you reach out to them to negotiate a lower rate. That’s a huge plus to your repayment plan.
People ask for this, and as long as you’ve got a clean history with them, you should get a nice deal and a reviewed rate.
14. Avoid Spending Temptations
It’s easy to want to indulge in some pointless expenses, after driving past a favorite restaurant. And when you have the cash, debit card or credit card on you, the temptation may appear impossible to resist.
That’s something to avoid at all cost, at this moment. So, it’s your job to determine what triggers your spending, and take steps to avoid them. In the scenario above, it could be as easy as leaving all the excess money and cards at home.
Also, keep your fridge fully stocked. That way, there’s no point in going out, when all you need to make a nice meal is right at home. It all boils down to your decision. Make it stand.
15. Get a Roommate or Downsize Your Home
This is another interesting way to earn additional cash. It doesn’t even need you to do anything. If your house has a free room, rent it out to a roommate. That would half your bill for rent each month. By that, you get more free cash to tackle your debts.
But if you’ve got a single-room home, you may want to consider downsizing to cut rent costs. This means you take a smaller home, in exchange for what you have now. That way, you pay smaller rent.
16. Stay Motivated
Now, this is very important. It’s true that you need to make some changes to your spending lifestyle while paying off debt.
However, that could unknowingly drive you into depression. For some people, maybe including you, they derive much energy from these things that are considered too expensive at this moment.
So, instead of going blank on life, you should set out time to catch up with things you love. Don’t just withdraw from them suddenly, if you know that’ll be too hard to bear.
You can also keep your friends in touch, as well as family members, so you have people around to cheer you on as you race for a debt-free life.
17. Embrace Contentment
The last one on paying off debt is embracing contentment.
One of the highest triggers of debt is that unjustified need to be like others. It’s a psychological state that is capable of subjecting anyone to a life of misery with debts.
So, avoid falling into this circle. You most likely don’t have enough now, and during your debt repayment period, you’ll come across many situations that will want to share your goal.
The key is to remain contented, comparing yourself to no one else.
It’s actually impossible to scale through this, for someone who’s got no contentment. For this period, focus only on those things that really matter to you, and stay happy with them.
Don’t delay it anymore. Whether you’re battling credit card debts, student loans, or other categories of debt, you can’t get stuck with it for life, if you decide to be free.
Of course, this won’t happen in a moment. But if you could take the pain to do the needful, you’ll be amazed at how fast you escape these debt holes.
Following the steps above, you can be sure of paying off debt soon and earning yourself a debt-free life soon enough.
Have a question or an additional point in mind? Let’s get talking in the comments.