If you’re in debt and desperate for a way out, those first few steps can feel overwhelming. Not only do you have to face the reality of what you owe, but you have to figure out how in the world you’ll pay it back. A lot of times that can mean completely reinventing your budget – and drastically cutting your expenses so you can pay “extra” on what you owe.
Of course, there are books, spreadsheets, and apps you can use to further your goals. And if you’re particularly tech-savvy, an up-and-coming product might help you get on the right track without too much stress on your part.
Still, many resources you find online cost money – real money. And when you’re trying to get out of debt, shelling out cash for a new product, book, or service might be the last thing on your agenda.
But, you don’t have to get all technological or spend money on a product if you want to get out of debt. And if you strip the software programs, apps, and courses down to the details, you’ll find that the path out of debt is actually quite simple.
- First, you need to track your spending so you know where your money is going.
- Second, you need to cut your spending.
- Third, you need to create a very basic budget to live by.
- And finally, you need to throw your extra money towards your debts in whatever fashion makes the most sense.
Surprising Tools to Help You Get Out of Debt
While it’s not always as easy as it sounds, it’s not rocket science, either. To begin a journey out of debt without all the hype, let’s get down to the basics. Here are a few surprising tools you can use to get out of debt that work – and best of all, they’re entirely free.
Pen and Paper
While there are plenty of software programs that promise to streamline the budgeting process and help you get out of debt, most people can accomplish the same thing with an old-fashioned pencil or pen and a piece of paper. It all starts with tracking your expenses from the previous few months – taking special care to tally up each category of your spending on a piece of paper.
Once that step is completed, you can use another piece of paper to create your ideal budget for the next month. Create a list of your regular monthly bills and your estimated expenses – things like groceries, utility bills, transportation, and miscellaneous. Then, as the month progresses, you can use the same written budget to check off bills and expenses as you pay them. By the end of the month, you should end up with a budget full of “checked off” items and a fairly low bank account balance. Then, you’ll simply rinse and repeat.
- Related: How and Why to Use a Zero-Sum Budget
If you’re carrying high-interest debts, paying them off as quickly as you can is the smartest move you can make. However, one type of credit card – a balance transfer card – can help you speed up the process tremendously, and all while helping you save money in the process.
The best balance transfer offers come with 0% APR for a period of 12 to 21 months, which means you’ll pay zero interest during the length of your promotional period. Best of all, at least one balance transfer card doesn’t charge a transfer fee if you move a balance over within the first 60 days.
To get the most out of a balance transfer offer, you’ll need to transfer all of your high-interest debts onto a card with the most attractive 0% APR introductory offer. Then, you’ll use that timeframe – whether it’s 12 months, 15 months, or longer – to pay down your debts with fervor. And don’t put any new purchases on the card until you’ve paid off the entire transferred balance!
Of course, you don’t have to complete a balance transfer to lower the interest rate on your debts. If you’re not in the mood for a new card, many credit card issuers might offer you a lower interest rate if you pick up the phone and ask them for their best offer.
Tell your card issuer that you’re considering transferring your balance to another bank with better terms. If they want to keep you as a customer, they might consider dropping your APR to a rate that is competitive with what you’ll receive elsewhere. The less interest you have to pay each month, the more money you can devote to your balance — and the faster you’ll be able to pay off your outstanding debts and put them behind you.
Will you really be able to get a lower interest rate just by calling and asking for one? It’s hard to tell, but you can (and should) give it a shot. The worst they can say is no.
Most of us have more clutter in our homes than we realize or would like to admit. But having extra stuff laying around makes it much easier to get out of debt. You sell stuff you don’t need or want on Craigslist, eBay, and Facebook yard sale groups, but you can also have a good old-fashioned garage sale.
Thanks to all of the free options available online, you can typically advertise your garage sale for free. Once your sale is up and ready to go, post ads on your neighborhood or city Facebook pages, on Craigslist, and on any other online message boards you belong to.
Once you’ve earned some extra cash for your old stuff, throw it directly at your highest interest debt for the biggest impact.
- Related: A Guide to Selling Unwanted Items
A Deep Freezer
If your grocery budget is one area you struggle with, there are plenty of cooking and shopping strategies to consider. A few of those strategies – once-a-month batch cooking and bulk shopping – work best if you have plenty of room in your freezer, or an entire deep freezer you can use.
With make-ahead meals, you’ll set aside one day per month to create multi-ingredient dinners and lunches that can be frozen ahead of time. By having plenty of meals stashed away, you shouldn’t be tempted to go out to eat when you’re in a hurry or don’t have time to go to the store.
Meanwhile, making meals in batches allows you to buy the ingredients in bulk. Purchasing in bulk and freezing larger portions, meats, or other foods is also a smart option if you have a chest freezer. If you have the storage space, you can stock up on hams, turkeys, and other ingredients that freeze well when they’re on sale. By purchasing these expensive items at the lower bulk rate or when they’re on sale, you’re bound to save money over time.
- Related: The Ultimate Guide to Buying in Bulk
A Box of Envelopes
If you want a budgeting system that is technology-free (and also free), you can always consider the envelope budgeting system. Trent has written about this strategy before, outlining both the pros and cons.
Using this strategy requires some basic planning and — like almost any budget — a dose of self-restraint. At the beginning of each month (or on payday) you’ll withdraw the money you’ll need to cover your expenses for a set amount of time. Then you’ll divvy up the cash and stuff it into different envelopes, each labeled to show what category the money inside is earmarked for.
So you may have one envelope labeled “Groceries – $150/week,” and another that says, “Rent – $800/month.”
The system works well if you start on a payday. Assuming you get paid weekly, you’d put $200 in the rent envelope each week, $150 in the groceries envelope, and so on.
Then comes the hard part: Only use the money in the envelope for its stated purpose. So if you go grocery shopping, bring your groceries envelope, and pay with only the cash inside it — nothing else.
You can use all cash, or adapt this strategy to work with checks or even paper slips, since it can be difficult to pay every bill in cash. But whatever strategy you use, all you should need is a box of envelopes and a simple written budget. After you have those tools squared away, the rest is on you to make it work.
The Bottom Line
With all of the new technology out there, getting out of debt is getting more complex than ever. But if you’re not used to technology – or simply don’t like using it – there are plenty of old-school tools you can use to get out of debt instead.
The most important thing to remember is that you have to take that first step – whether it’s downloading a new software program or whipping out your old bank statements to track your spending for the first time. At the end of the day, the path you choose to get out of debt doesn’t matter nearly as much as the fact that you made it a priority.
What everyday tools did you use to get out of debt? Do you prefer complex software programs, or do you like keeping your budget fairly basic?