25 Ways to Get Out of Debt on Your Own


Around 80% of Americans are caught up owing all kinds of money and desire to get out of debt. These range from house-related debts such as mortgages and home equity lines of credit (HELOCs) to revolving debts (such as credit cards and retail cards) and consumer loans like student loans and personal loans. No matter what form debt takes, it keeps people from living a good quality of life. As easy as it is to get into debt, getting back out of it can be a painful journey. Having said that, it is not impossible. So if you are strong in your resolve, here are some ways that can help you get out of debt.

Stop Taking on More Debt

The first step to getting out of debt is to stop it from accumulating further. To rule out debt as an option, start using cash or debit cards to purchase things. 

Start Couponing

You can save a lot of money by couponing. It is the act of collecting and using coupons with deals and discounts on goods and services. Just make sure you’re using these coupons for products you need (such as grocery items).

Close or Reduce Credit Card Spending Limits

Ask card issuers to reduce your spending limit or even close it. This will allow you to focus on paying off the debt you already have. 

Cut the Cable

Since you have internet access, you don’t need the cable to watch your favorite shows. So cut the cord and add the bill amount in your monthly debt payment.

Avoid Major Purchases

Prioritize your needs and avoid costly things. A big purchase on credit may give you instant gratification, but it’ll create a mountain of debt handling which will be too much of a burden later. 

Pick Up Side Jobs

Getting a side job or doing extra shifts is a common way to pay down debt. This might not be possible for everyone, but if you can manage to earn extra, it can speed up the process of debt repayment significantly.

Sell Everything You Don’t Need

To drum up quick cash, sell off the stuff that’s lying useless at your place or that you could easily do without. Set up a garage sale (if your neighborhood permits) or sell through a consignment shop, online resellers and social media. 

Withdraw Gym Membership

Gym workout may be ideal, but it’s certainly not necessary. There are parks and other places where you can carry out a reasonable workout routine.

Check if you have ‘Unclaimed Property’

When assets like unclaimed dividends and closed bank accounts holding cash are not claimed for a certain time period, they are sent to the state of property owner’s residence and labelled ‘unclaimed property.’ In order to verify whether or not you have assets or cash you’re unaware of, check with the National Association of Unclaimed Property Administrators. 

Free Entertainment

Be creative and come up with free ways to pass your leisure time. Choose free concerts and going to parks, over activities like bowling, golf, movies etc.

Ask for Lower Interest Rates 

If your credit card interest rates are too high, try negotiating with your card issuer. Having a good credit history increases your chances of getting a reasonably lower interest rate.

Consider a Balance Transfer

If your credit card company is not flexible about interest rates, consider a balance transfer. There are some balance transfer offers through which you can secure a 0% APR. However, you need to make sure you pay off your debt within the zero-interest introductory period, which is typically 12-18 months. 

Increase Your Monthly Payment

If you keep making the minimum payment each month, breaking the debt cycle would be nearly impossible. Keeping yourself ahead of the debt with larger payments will help reduce the impact of interest accumulating on the amount. 

Establish an Emergency Fund

Having savings for emergency situations will prevent you from taking on debts in case of unforeseen circumstances and events. 

The Avalanche Method

In this method, you pay extra towards the debt that bears the highest interest rate (until it’s gone) and make minimum monthly payments on the remaining debts. As the burden of the biggest debt is lifted, cash flow is increased which helps in tackling other debts. 

Use ‘Found Money’ to Pay off Balances

If you come across ‘found money’ in the form of inheritance, annual raise, bonus at work or even a fat tax refund, use it sensibly to get rid of your debts. 

Debt Snowball Method

This is a debt reduction strategy in which you pay down debt in the order of smallest to largest. When the smallest debt is paid off, you use the money you were paying on it, onto the next smallest balance.

A Weekly No-Spend Day

Pick up a day of the week you tend to blow your budget and refuse to spend any money that day no matter what the temptation. 

Choose the Cheaper Option

Whatever you purchase, make comparisons and always go for the cheaper option. In this way you can take care of more needs in less money. 

Cash Out a Life Insurance Policy

This is a risky strategy and can come with tax consequences. But if your situation is too tight, you could borrow some amount from your insurance policy.

Withdraw from Retirement Fund

In extreme cases, you could pull some money from your retirement fund. For this you’ll have to face withdrawal penalty, additional tax liability and lesser savings upon retirement. 

Settling Debts

Settling your debts means asking your creditor to accept a one-time, lump-sum payment in return for cancellation of the remaining debt. Typically creditors accept these offers on accounts that are either in default or at a risk of defaulting. 

Cut Down on Vehicle Expenses

The average vehicle owner spends more than $9,000 a year to own and operate it. If that money is used to pay your debt, it can make a huge difference. Consider becoming a one-car household or get rid of personal vehicles and use public transportation. 

Consignment Shopping

Visit your local consignment stores to get clothes in good condition. This can save you a lot especially when you’re buying for kids that grow out of clothes very soon. 

Quit Expensive Habits

If you’re consistently falling short on your debt each month, it may be a good idea to evaluate your habits. Quit expensive habits like drinking or smoking as they not only stand between you and fitness goals, but your financial goals as well.