We’re a nation in debt. As of late 2017, the average American carried $6,354 in credit card debt and more than $24,700 in non-mortgage debt such as car loans, according to Experian. The average student loan balance, meanwhile, has hit a record high of $34,144.
The fact is, more than half of Americans actually spend more than they earn each month, according to a Pew Research study, and use credit to bridge the gap. So it’s easy to see how so many people are struggling with debt — and why some choose to bury their heads in the sand. For many in debt, the reality of owing so much money is too much to face — so they simply choose not to.
But sometimes, disaster strikes and people are forced to confront their circumstances head-on. A series of unfortunate events — a sudden job loss, an unexpected (and expensive) home repair, or a serious illness — can knock one’s finances so off track they can barely keep up with their monthly payments. And it’s in these moments of disaster when we finally realize how precarious our financial situations are.
Other times, we just become sick of living paycheck to paycheck, and decide we want a better life — and that’s OK, too. You shouldn’t have to confront disaster to decide you don’t want to struggle anymore, and that you want a simpler existence. For many people, becoming debt-free the hard way is the best and only way to take control of their lives and their futures.
How to Get Out of Debt Faster
Unfortunately, the space between realizing your debt is out of control and actually getting out of debt can be wrought with hard work and heartache. No matter what kind of debt you’re in, paying it off can take years — or even decades — to get out of debt.
Fortunately, some strategies exist that can make paying off debt faster — and a whole lot less painful. If you’re ready to get out of debt, consider these tried-and-true methods:
1. Pay more than the minimum payment.
If you carry the average credit card balance of $15,609, pay a typical 15% APR, and make the minimum monthly payment of $625, it will take you 13.5 years to pay it off. And that’s only if you don’t add to the balance in the meantime, which can be a challenge on its own.
Whether you’re carrying credit card debt, personal loans, or student loans, one of the best ways to pay them down sooner is to make more than the minimum monthly payment. Doing so will not only help you save on interest throughout the life of your loan, but it will also speed up the payoff process. To avoid any headaches, make sure your loan doesn’t charge any prepayment penalties before you get started.
If you need a nudge in this direction, you can enlist the help of some free online and mobile debt repayment tools, too, like Tally, Unbury.Me, or ReadyForZero, all of which can help you chart and track your progress as you pay down balances.
2. Try the debt snowball method.
If you’re in the mood to pay more than the minimum monthly payments on your credit cards and other debts, consider using the debt snowball method to speed up the process even more and build momentum.
As a first step, you’ll want to list all of the debts you owe from smallest to largest. Throw all of your excess funds at the smallest balance, while making the minimum payments on all your larger loans. Once the smallest balance is paid off, start putting that extra money toward the next smallest debt until you pay that one off, and so on.
Over time, your small balances should disappear one by one, freeing up more dollars to throw at your larger debts and loans. This “snowball effect” allows you to pay down smaller balances first — logging a few “wins” for the psychological effect — while letting you save the largest loans for last. Ultimately, the goal is snowballing all of your extra dollars toward your debts until they’re demolished — and you’re finally debt-free.
3. Pick up a side hustle.
Attacking your debts with the debt snowball method will speed up the process, but earning more money can amplify your efforts even further. Nearly everyone has a talent or skill they can monetize, whether it’s babysitting, mowing yards, cleaning houses, or becoming a virtual assistant.
- Read more: How to Make More Money
4. Create (and live with) a bare-bones budget.
If you really want to pay down debt faster, you’ll need to cut your expenses as much as you can. One tool you can create and use is a bare-bones budget. With this strategy, you’ll cut your expenses as low as they can go and live on as little as possible for as long as you can.
A bare-bones budget will look different for everyone, but it should be devoid of any “extras” like going out to eat, cable television, or unnecessary spending. While you’re living on a strict budget, you should be able to pay considerably more toward your debts.
Remember, bare-bones budgets are only meant to be temporary. Once you’re out of debt — or a lot closer to your goal — you can start adding discretionary spending back into your monthly plan.
5. Sell everything you don’t need.
If you’re looking for a way to drum up some cash quickly, it might pay to take stock of your belongings first. Most of us have stuff lying around that we rarely use and could live without if we really needed to. Why not sell your extra stuff and use the funds to pay down your debts?
If you live in a neighborhood that permits it, a good old-fashioned garage sale is normally the cheapest and easiest way to unload your unwanted belongings for a profit. Otherwise, you can consider selling your items through a consignment shop, one of the many online resellers out there, or a Facebook yard sale group.
6. Get a seasonal, part-time job.
With the holidays coming up, local retailers are on the lookout for flexible, seasonal workers who can keep their stores operational during the busy, festive season. If you’re willing and able, you could pick up one of these part-time jobs and earn some extra cash to use toward your debts.
Even outside of the holidays, plenty of seasonal jobs may be available. Springtime brings the need for seasonal greenhouse workers and farm jobs, while summer calls for tour operators and all types of outdoor, temporary workers from lifeguards to landscapers. Fall brings seasonal work for haunted house attractions, pumpkin patches, and fall harvest.
The bottom line: No matter what season it is, a temporary job without a long-term commitment could be within reach.
7. Ask for lower interest rates on your credit cards — and negotiate other bills.
If your credit card interest rates are so high it feels almost impossible to make headway on your balances, it’s worth calling your card issuer to negotiate. Believe it or not, asking for lower interest rates is actually quite commonplace. And if you have a solid history of paying your bills on time, there’s a good possibility of getting a lower interest rate.
Beyond credit card interest, several other types of bills can usually be negotiated down or eliminated as well — we highlighted them in Six Bills You Can Negotiate Down to Save Money. Always remember, the worst anyone can say is no. And the less you pay for your fixed expenses, the more money you can throw at your debts.
If you’re not the negotiating type, a service like TrueBill can help. The app will review your purchase history to find forgotten subscriptions and other repeating fees you might want to cut from your budget, and it can even negotiate some bills down for you.
Check Your Personal Loan Rates
Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.
8. Consider a balance transfer.
If your credit card company won’t budge on interest rates, it may be worth looking into a balance transfer. With some balance transfer offers, you can secure 0% intro APR for up to 18 months, although you might need to pay a balance transfer fee for the privilege.
If you have a credit card balance you could feasibly pay off during that time frame, transferring the balance to a card like the Discover it® Balance Transfer could save you money on interest while simultaneously helping you pay down debt faster.
- Intro Balance Transfer APR
- Intro Balance Transfer Period
- 18 months
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
- Regular APR
- 13.49% - 24.49% Variable
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
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- Related: Best Balance Transfer Credit Cards
9. Use ‘found money’ to pay off balances.
Most people come across some type of “found money” throughout the year. Maybe you get an annual raise, an inheritance, or bonus at work. Or maybe you count on a big, fat tax refund every spring. Whatever type of “found money” it is, it could go a long way toward helping you become debt-free.
Each time you come across any unusual sources of income, you can use those dollars to pay off a big chunk of debt. If you’re doing the debt snowball method, use the money to pay down your smallest balance. And if you’re left with only big balances, you can use those dollars to take a huge chunk out of whatever’s left.
10. Drop expensive habits.
If you’re in debt and consistently coming up short each month, evaluating your habits might be the best idea yet. No matter what, it makes sense to look at the small ways you’re spending money daily. That way, you can evaluate whether those purchases are worth it — and come up with ways to minimize them or get rid of them.
If your expensive habit is smoking or drinking, that’s an easy one — quit. Alcohol and tobacco do nothing for you except stand between you and your long-term goals. If your expensive habit is slightly less incendiary – like a daily latte, restaurant lunches during work hours, or fast food — the best plan of attack is usually cutting way down with the goal of eliminating these behaviors or replacing them with something less expensive.
11. Step away from the _____.
We’re all tempted by something. For many, it might be the local mall or our favorite online store. For others, it might be driving by a favorite restaurant and wishing we could pop inside for a favorite meal. And for those with a penchant for spending, having a credit card in their wallet is too much temptation to bear.
Whatever your biggest temptation is, it’s best to avoid it altogether when you’re paying down debt. When you’re constantly tempted to spend, it can be difficult to avoid new debts, let alone pay off old ones.
So, avoid temptation wherever you can, even if that means taking a different way home, avoiding the Internet, or keeping the fridge stocked so you aren’t tempted to splurge. And if you must, stash those credit cards away in a sock drawer for the time being. You can always bring them back out once you’re debt-free.
The Bottom Line
It’s easy to continue living in debt if you never have to face the reality of your situation. But when disaster strikes, you can gain a brand new outlook in a hurry. It’s also easy to get sick of the paycheck-to-paycheck lifestyle, and look for ways to get out from under the crushing weight of too many monthly payments.
No matter what type of debt you’re in — whether it’s credit card debt, student loan debt, car loans, or something else — it’s important to know there is a way out. It may not happen overnight, but a debt-free future could be yours if you create a plan — and stick with it long enough.
No matter what that plan is, any one of these strategies can help you get out of debt faster. And the faster you become debt-free, the quicker you can start living the life you truly want.
What are some strategies you have used to pay down debt quickly? Have you ever tried anything on this list?
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