62 Creative Ways to Get Out and Stay Out of Debt

Although some of the tips contradict one another, they each have good reasons behind them, and will work better in different situations. Since nobody's debt is the same, and no two people are the same either, use the ones which work best for your needs.

  1. It's hard to change, and it can be even harder to get out of debt. Make a commitment, and if it seems like you're just treading water, have a second look at that commitment.
  2. Prevent debt by paying cash for everything and living below your means – in other words, spending less than your income could buy.
  3. Teach your kids how to not make the same mistakes you did.
  4. Always know precisely how much money you have in your checking account, and do your best to spend much less than that.
  5. Stop spending before it's too late and you have to go on a serious financial diet.

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  1. Destroy DebtIncrease your 401(k) contribution by one to two percent each time you get a raise – it won't be missed.
  2. If you don't have a 401(k), act like your raise didn't happen and just put the extra money into your debt.
  3. Make extra payments toward your debt with extra money like bonuses and overtime.
  4. Realize that if it took you five years to get into this mess, it's probably going to take much longer to get out of it.
  5. Think about where you will be in five or ten years instead of next month's payments to stay motivated.
  6. Find your “why” to get out of debt. Is it so you can be charitable, pay for your child's college education, or maybe to start your own business? The passion will help you find what works, stick by it, and automatically drive you to do the right thing.
  7. Make your debt repayment strategy a habit – something you don't have to think about.
  8. If you do think about it, consider it wealth rather than debt. Think “this will help contribute to my overall wealth” instead of reminding yourself you're in debt.
  9. Or, think about debt as slavery. You want to break free of slavery, right?
  10. Keep your mindset positive. Focus on the benefit of owing less rather than the times you tell yourself no or realize others have more expendable cash than you do.
  11. Write “Do I really really need this?” on a piece of brightly colored paper and put it in your wallet.
  12. Imagine what debt freedom will feel like.

Video: Getting Out of Debt is a Choice

  1. Cook at home instead of eating out, except for very special occasions. If you don't have time, get creative – maybe wake up a few minutes early and cook dinner with a crock pot.
  2. Come up with ways to have fun without spending anything.
  3. Be a tourist at home. Look in your newspaper or local-focused websites for ideas on free and cheap entertainment.
  4. Get down to basics. Learn to make and re-work furniture or sew.
  5. Grow food in a garden or pots if you don't have a yard.
  6. Don't hate it 'til you try it. If cooking at home isn't as bad as you thought, try an older used car, roommates, thrift stores, and wearing a little more in the house to turn down the heat.
  7. Be ready to make sacrifices. Selling your car and getting a used one without a payment can be just what your repayment strategy needs.
  8. Make an emergency fund your number one priority. Whenever you come into extra money, such as a bonus from work or a tax return put some away for those rainy days then pay off debt. Don't pay off your cards from the emergency fund either, act like it isn't there.
  9. Keep one credit card with a low credit limit, and don't use credit cards to make up where your paycheck slacks off.
  10. Put all of your expenses and debts into a spreadsheet, track how much you pay, interest, and balances. Update it regularly whenever you make a payment, and watch your debt drop.
  11. Make another column in your spreadsheet for assets – or things you can easily sell and their approximate value – and try to make the difference in value grow more toward the positive.
  12. You could also make a budget and assign every dollar to a place. Plan ahead for future expenses so you don't have to borrow again to keep up.
  13. Try to make sure your debt repayment strategy doesn't cut into keeping the lights on and food in the fridge.
  14. Make sure your budget includes money for fun and social activities. It takes a real dullard to stick by a budget without fun for however many years it will take to get out of debt.
  15. Be honest with your budget, and don't forget things like gifts.
  16. Eliminate bills whenever possible. Luxuries like cable TV, magazine subscriptions, gym memberships, and that fast food breakfast can and should be dropped. If you're not convinced, calculate your budget and debt repayment twice – once with the luxuries, and once without.
  17. Turning off your TV will also help curb your urge to buy, along with throwing out catalogs and other ads.
  18. Watch yourself and realize when you're buying something because society expects it, your parents expect it, or to “keep up with the Joneses.”
  19. Surround yourself with people who are the way you want to be so peer pressure doesn't get you into trouble.
  20. Focus on your goals – if you want to spend more on housing, kids, and have a stay-at-home parent, then where are you willing to sacrifice time and expense?
  21. Even a haphazard plan is better than no plan at all.
  22. Once you have paid off your debts, save 60%, and splurge with the remainder.
  23. If you don't have much of an emergency fund, leave a big buffer in your budget just in case.
  24. Although it will show up on your credit report and hurt your score, take advantage of credit counseling if you're in deep. They can help you work out a plan and negotiate with your creditors to help decrease your debt.
  25. Fire a volley of money at your debt – pay just minimums on everything to focus on one debt, and then move on to the next one when it is paid.
  26. Focus on high interest debts first.
  27. Or, pay off your smallest balance first to get something accomplished.
  28. Don't just pay the minimum. Your debt will double every few years if you just pay the minimum.
  29. Bounce your debt around different credit cards through balance transfers, just watch out for transfer fees.
  30. Work with your and your family's spending habits, and limit them whenever necessary. Make sure you are all on the same page and agree to stick by the plan.
  31. If your spouse or family isn't really coming along too well, focus on changing yourself and lead by example. Don't make it into a bridge jumping competition.
  32. Reward yourself for every small accomplishment – but without spending too much money.
  33. Figure out what tools work for you and stick by them. There is no shortage of free ideas and tools, so you have no excuse for not experimenting.
  34. Read books, publications, and blogs. A good place to start is Dave Ramsey's “Your Money or Your Life.”
  35. Get mad at the credit card companies by watching the PBS documentary or Maxed Out.
  36. Oprah's Debt Diet has a lot of great advice and forms to help you develop a plan.
  37. Jerrold Mundis has also written a good book to read, “How to Get Out of Debt, Stay Out of Debt, and Live Prosperously.”
  38. Track expenses in personal finance software like Quicken. Label your types of expenses and analyze how much you're spending to see where you are overspending.
  39. Adopt a cash mindset and stop borrowing money – in other words, no credit cards, no new loans, and no cash advances. If you can't buy it with cash, then you can't afford it.
  40. Replace credit and loans with savings. Save up to buy large ticket items instead of borrowing. You may even realize it's not worth it anyways.
  41. Moving into a smaller place will force you to get rid of a lot of things which probably caused your debt and teach you just how valuable they really were.
  42. Change the way you think about purchases. Whatever you earn and however you earn it, figure out how much you make per hour and apply that in terms of time to your purchase. Is it worth 10, 20, 30 hours of your time?
  43. Think small and long term instead of big and now – in other words, fight for a 2% lower interest rate or cancel a luxury to invest or pay debt with the difference.
  44. Use shopping center sales and clipped coupons for your weekly food shopping, and put the money you save into a savings account.
  45. Look into second incomes, perhaps from starting an online business without spending a lot of money.

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Additional Resources:

Auriton Solutions
(877) 322-8777

Consumer Credit Counseling Service Of Los Angeles
(800) 750-2227

National Budget Planners Of South Florida
(954) 785-8618

Tides Foundation
(415) 561-6400

Family Debt Arbitration
(603) 483-0593

Commonwealth Catholic Charities
(804) 285-5900

IFMC Down Payment Assistance
(386) 668-3636

Blue Haven Capital LLC
(630) 588-3800

S C Ministry Foundation
(513) 347-1122

IA Global Inc
(813) 261-5157

Mass Housing Investment Corporation
(617) 850-1000

Cape Ann Commercial Fishermans
(978) 283-2959

Global Financial Partners Inc
(813) 261-5116

JP Morgan Investor Service CO
(617) 557-8000

Patient Financial Concepts
(973) 396-2668

Clinton Global Initiative
(212) 710-4400

Financial Supervisory Service
(212) 350-9388

Chautauqua Opportunities Inc
(716) 664-4999

Greenpath Debt Solutions
(574) 293-0075

Consumer Credit Counseling Service
(505) 884-6601

ClearPoint Credit Counselors Solutions
(800) 737-2933 800

Lonnie Bowman Ministries
(229) 446-1664

Family Foundations
(904) 396-4846

Solidary Credit
(305) 406-0188