With all kinds of loans hanging on our heads, becoming debt-free sounds like a dream. The money you owe a friend, student debt, car loans, mortgages, etc.—all combined become a hard-to-manage disaster.

Plus, becoming debt free is more than paying off a credit card loan. It means prioritizing debts, changing spending habits, learning how to budget and much more. Check out these tested and proven ways to get out of debt.

Adjust Your Spending and Values

Don’t fall into the big-spender territory by trying to appear to have it all. Start avoiding overspending by adopting new habits, analyzing your credit card spending and building a good budget. If you can, pay off one debt at a time? starting with the one with the lowest balance or highest interest rate.

A budget is your debt payoff plan so it doesn’t have to be complicated Live with a bare-bones budget until you’re out of debt to pay down debt faster. With this kind of approach, you’ll need to cut your spending as much as you can. Get rid of any “extras” like cable TV and going to eat out.

Consider also downsizing your lifestyle and sticking to your spending rules like avoiding buying stuff out of boredom. Making a list of essential items and evaluating your spending every month can help align your spending with your values.

Save for Emergencies and Goals

Saving for an emergency fund while paying off what you owe is one of the best financial decisions you can ever make. While this may sound counterintuitive for those trying hard to pay off their outstanding balances, it’s often not.

Emergency funds are meant to bail you out of your difficulties. If you lose your job, for example, you can use it to save yourself from going into debt.

A typical emergency fund should hold about six months of living expenses. If you can achieve that amount, aim for a month’s living expenses which is still a good starting point.

Store your savings somewhere risk-free and liquid. You can put it in an interest-earning account so it earns some extra cash while you aren’t using it.

Earn More

One of the ways to becoming debt-free is getting enough money to sustain your life and extra cash to pay down your debts.

While cutting spending can help you earn more, it doesn’t always work for everyone. Consider looking for a higher paying job or getting a second job to add more money to your monthly income. The truth is, second jobs aren’t always exciting but are a sure way to help you get out of debt fast.

Putting in additional hours working gigs, for example, can be exhausting but will help reach goals faster. The good thing is that nearly everyone has a skill or talent they can use to earn extra cash on the side. There are plenty of apps and online resources, such as Fiverr or TaskRabbit, that allow you to find quick work.

Another option is starting a part-time business, like selling stuff on eBay or running a blog. Also, sell items you don’t need and those you can live without. Consider digging through your closet to find stuff you can sell via the numerous online resellers out there. Use the money to pay down your debts.

Increase Your Monthly Payment

You don’t always have to make the monthly minimum payments. Whether you’re carrying student debts, personal loans or credit card debts, paying them earlier is considered a good idea. Even just a few extra dollars every month will help.

Paying loans sooner is not only a great way to save on interest but will also increase the speed of the payoff process. However, if you pay off your loans early, ensure they don’t charge prepayment penalties.

It makes sense to pay the bare minimum on some of your debts when you have a loan repayment plan. The goal is to make significant dips in at least one of your unpaid loans each month.

Talk to a Credit Counsellor

Knowing where to find help when things seem not to work is a good step towards becoming debt free. Talking to a credit counselor can put you on the right path to paying down your debts.

A counselor can recommend and assist you in understanding the programs available to help you get out of debt. The best part is consulting with credit counselors can be inexpensive and is almost always confidential and non-judgmental.

When shopping around for a debt solutions service, it’s important to find out if the company is licensed. You should also check for reviews to figure out how the company treats its customers.

You can always enlist the help of a good debt resolution service to help with your credit score and learn more about paying down debts.

Ask for Lower Credit Card Interest Rates

The higher the credit card interest rates, the longer you’ll pay debts. This is because much of what you pay will go toward the interest charge instead of the actual balance.

Asking for your interest to be reduced is quite commonplace so call your card issuer for negotiation. There’s a possibility to negotiate lower interest rates successfully if you have a good payment history

Creditors lower rates as they see fit so if your request is turned down, you can always take advantage of promotions. And there are many. For instance, some creditors offer lower rates to customers who pay off their balance within a specified period.

Consider Consolidation

Turn all your debts into one single debt. Check if your credit union or bank can consolidate all your debts into one loan at a lower interest rate. This strategy works best for credit card loans as they often attract high-interest rates.

Put Yourself On the Path of Becoming Debt Free

The decision to becoming debt free is life-changing and it’s something you can do yourself. It often requires self-motivation, some learning and willingness to use the right tools to get there.

Applying these strategies is the right step towards paying off your debts. But remember, everyone’s financial burdens are different so it’s always advisable to seek personalized guidance and plan.

For more tips and advice, check out the rest of our blog.