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How to Get Out of Debt
It’s hard to stay motivated when trying to pay off debt. You might feel stuck in a never-ending cycle of payments and interest rates.
It can feel like you’ll never get out from under your debt. You’re not alone – over 44 million Americans are struggling with the same thing.
Paying off your debt doesn’t have to be difficult. There are many creative ways to pay off debt. We’ve compiled a list of the best tips and tricks for you so that you can start paying off your debt today.
9 Creative Ideas to Pay Off Debt
There are plenty of ways to reduce debt. Whether you’re looking for short-term or long-term solutions, we have something for everyone. Let’s get creative!
Set Up a Monthly Challenge
First, one of the best ways to get creative with paying off debt is to set up a monthly challenge. For example, you could challenge yourself to pay a specific monthly or make extra debt payments weekly.
This gives you a goal to work towards with your debt payoff and can help keep you motivated as you reduce your debt.
Find a Side Hustle
Whether you’re trying to become debt-free, reign in your credit card debt, save money or obtain financial freedom, having multiple forms of income will be a great tool to reach your financial goals.
In today’s internet-driven world, there are plenty of side hustles you can start today with no fee or experience.
- Dogsit or Housesit: Apps like Rover let you get paid to watch dogs in your home, care for a dog for a weekend, or housesit while someone is out of town. These apps are a great way to make extra money that you can put towards getting your debt paid.
- Babysit: If you like kids and have experience, babysitting is a great way to pay off debt.
- Drive for food delivery service: Apps like DoorDash and UberEats are free to sign up for and allow you to work on your own time to make some extra cash to put towards debt repayment.
- Sell printables: Etsy is a great platform to sell print-on-demand items. You can create artwork, templates, planners, or other digital products and set your own prices to sell them on this platform.
Make Money Using Online Surveys
eking out online surveys is another creative way to pay off your debt. There are several websites and apps that offer paid surveys as a way for companies to gather market research data, and you can make some extra cash by completing these surveys.
Some popular survey sites include SwagBucks, InboxDollars, and Surveyeker. So if you’re looking for an easy way to make extra money, consider signing up for some paid surveys and putting that cash toward your debt repayment goals.
Sell Unused Items
Getting creative with paying off debt can also mean selling the things you don’t need or use anymore.
Sites like Craigslist, Marketplace, and eBay are great places to sell used items for cash that you can then put toward your debt.
So whether it’s electronics, clothes, furniture, or other household items, you can put whatever money you earn towards paying off your debt faster.
Get a Roommate
If you live alone and have the space to bring in a roommate, cohabitating with another person is an incredible way to save money. If you’re splitting the rent and bills, you can put all the money you are saving toward debt. Hey, you would’ve been spending that money anyway!
Flip Items for a Profit
Earning money through flipping items is another creative way to pay off debt. In this process, you purchase items at thrift stores or on Facebook Marketplace and then resell them for a profit.
This can be a very lucrative way to earn extra cash and put it towards your debt repayment goals.
Envelope Stuffing
Stuffing envelopes is a different way of budgeting. It involves putting physical cash into envelopes each pay period. Each envelope has its purpose, i.e. electricity, groceries, rent, vacation, credit card debt, etc. This method is great for visual learners, so you can see the money going towards a cause.
Donate Blood
Another creative way to pay off debt is donating blood or plasma. Both activities are an easy and low-effort way to earn money to get out of debt.
Many donation centers will also offer incentives like free food or gift cards for donating, which can help offset the costs of your time investment even further.
Ask for Cash Gifts
If you have friends and family that want to support you on your debt repayment journey, one creative way to do so is by asking for cash gifts.
Rather than receiving traditional presents for special occasions like birthdays or holidays, you can politely ask your loved ones for cash gifts to pay off your debt.
Save More Money, Pay Off More Debt
Use Coupons
Coupon cutting isn’t what it used to be. In the past, people would clip coupons out of newspapers and magazines to save a few cents here and there on everyday purchases. But now, with smartphones and online shopping, you can get far greater benefits from your efforts.
You can also get alerts when items you regularly buy go on sale, and use coupons or cashback apps, such as Ibotta or Checkout 51, to get money back on your purchases.
Another great way to save is to use cashback sites, like Ebates and Swagbucks, which give you a small percentage of your purchase back when you shop at certain retailers.
Cut Out Unnecessary Expenses
Are you someone who has every tv streaming platform known to mankind? If so, it is time to hit the cancel button. Subscriptions like Netflix, HBO, Hulu, and Disney+ add up quickly, and that is all money that could be going toward paying off your debt.
Additionally, consider your daily expenses and see where you can cut back. For example, do you need a daily latte or lunch out? Cut back to just one day a week (or even every month), and that money is better off paying off your debt.
These short-term sacrifices will help you get out of debt sooner and free up money for other things, such as credit card bills.
Limit Going Out
Eating out or going out for drinks can be fun, but it also drains your bank account. So, plan to limit the number of times you go out each week or month.
You’d be surprised at how quickly margaritas and guac add up. A grocery budget can be a great saving tool for managing your debt.
Meal Prep
Eating at home may not feel like saving money, but it can be when you are in a situation where every penny counts.
One way to save on eating at home is to meal prep your meals for the week (or even longer). Go grocery shopping with a list and select recipes to make on Sunday so you have several days’ worth of food that’s already prepared and waiting for you so that you don’t have to make impulse lunch decisions and can continue to stick to your budget and save money.
Seek Out Free Entertainment Options
Budgeting and saving money gets a bad rap because most people think it means sacrificing your entire social life, but that isn’t necessarily true. While it does take conscious effort and planning to pay off debt, it doesn’t mean you have to stop going out with friends or being social.
Instead, look for free entertainment options – such as movie nights at home, visiting a local park or museum in your city, or even having fun right in your backyard. You can also check out your city’s website and find local free events you can attend.
Proven Ways to Reduce Debt
Make a Budget
This probably seems pretty obvious, but it is often an overlooked resource. Creating a budget and sticking to it is one of the most effective ways to reduce debt.
At its core, a budget helps you understand how much money you have coming in each month and how much is being spent on fixed costs such as rent or a car payment, variable expenses like food and entertainment, and debt payments.
This allows you to see where you can make adjustments, such as cutting back on discretionary spending or increasing payments to your debt.
There are plenty of useful and free applications that you can employ to help you manage your budget and keep it up to date.
Debt Snowball Method
The debt snowball method is the practice of paying off the smallest balance first. This method typically works by establishing the order of debt pay-offs.
For example, if you have multiple debts, such as a credit card, car loan, and student loan, you may start by first paying off the lowest balance.
Then, once that debt is paid off, you take the payment you used for that payment and apply it towards the next smallest debt.
This process helps keep you motivated as your debts decrease over time.
The Avalanche Method
The Avalanche Method is a good choice if you’re more numbers oriented and concerned about saving the most money. It effectively reduces overall debt because it focuses on paying off your highest-interest debts first.
This means making minimum payments on all your other debts and devoting as much money as possible to the one that accrues the most interest each month.
Set Up Automatic Transfers
You can set up automatic transfers to your debt agencies to make debt repayment even easier.
This allows you to have the money automatically sent to your creditors each month without manually transferring the funds.
Using this method means you won’t forget to make a payment and it also helps you stay disciplined and committed to paying off your debt.
Create Visuals for Yourself
Another way to keep yourself motivated and inspired as you work towards reducing debt is to develop visuals for yourself. For example, you could create a simple chart or tracking system that shows your progress over time.
Tracking using visuals helps your brain to see the progress you’re making and that can ultimately keep you motivated and pushing toward your goal.
Negotiate Lower Interest Rates
Evaluating your debts and looking for ways to reduce the interest rate on high-interest loans will also help you lower your debt.
For example, if you have a high-interest credit card that charges you 15% or more in interest, you may be able to negotiate a lower rate by calling the customer service line.
Reducing your high-interest rate allows you to save money and gives you more money to put toward your other debts.
Exceed your minimum payment when possible
Maintaining your minimum payments is crucial in reducing your debt, but it is also important to consider exceeding those minimums when possible.
By increasing the amount you pay towards your debts each month, you can see faster progress, which can help keep you motivated as you work towards getting out of debt.
Make Extra Payments
Along with exceeding your minimum monthly payment, you can also consider making extra payments on your debts.
This is especially helpful if you have a large debt or an outstanding balance on a high-interest loan.
We recommend setting aside a portion of every paycheck to go towards your debt, either by making additional payments or adding to your existing minimum monthly payments.
Debt Consolidation
When reducing your debt, one final strategy to consider is using a debt consolidation service.
Debt consolidation services work by taking all of your existing debts and combining them into one loan with a lower interest rate.
This can be an effective way to save money on high-interest loans, as well as make managing debt payoff.
Final Thoughts
Paying off debt is no easy task. Spending money is much easier than saving it. But there are many creative ways to pay off your debt, whether using online surveys, flipping items from thrift stores, or selling printables on Etsy.
And the best part is that with some creativity and determination, you can successfully pay off your debts and start building wealth for yourself.
The key is planning and patience. If you make a plan and stick to it, even if it takes a few years, have faith knowing that over time you are paving the path for your future self to have a financially free future.