How To Eliminate Your Debt

Recently, I published the article Reasons You’re Still in Debt. Like I said in that article, I think the first step in eliminating debt is to realize why you are in debt in the first place.

I believe that if you don’t know what your problem with debt to begin with is, then it would be hard to make a positive change.

Yes, it is great to just start attacking your debt, but you also don’t want to fall into the same cycle of going into debt over and over again.

After you realize why you are in debt (or why you keep going back into debt), the next step is to figure out how you will eliminate your debt. There are many different ways for you to attack your debt, and I prefer a mixture of everything.

Below are different ways to get rid of your debt.

1. Stop adding to your debt.

This sounds obvious, right? Like I said earlier, if you don’t know why you are in debt, then it would be hard to stop adding to your debt.

Also, if you’re eliminating debt but also adding to it at the same time then you won’t get anywhere fast.

Different ways that you could prevent yourself to stop adding more debt include:

• Canceling your credit card.
• Freezing your credit card.
• Asking for your credit card limit to be lowered.
• Don’t take out extra student loans that you don’t need.
• Think it over before you buy something.
• Avoid places like the mall altogether.

2. Create a budget.

Of course this is on my list. Why wouldn’t it be? If you don’t believe in a budget but you have a lot of debt, then you better start believing.

You should create a realistic budget so that you truly know how much you are spending. Then total how much you actually bring in each month. If you are bringing in less than you are spending then a change definitely needs to be made.

A budget can also help you see where your money is going so that you know what areas you need to work on. Maybe you never realized how much you spend on food each month, how much you spend on clothing or something else.

A budget really puts that in front of you so that you know what you can cut out of your spending (or at least lower your spending in that area).

3. Cut your expenses.

To continue with what I was saying above, you may have to cut your expenses in order to have a realistic budget so that you can pay off your debt.

If you have $100,000 in credit card debt, should you really still be spending $500 a month on clothing?

Probably not.

Depending on how quickly you want to get rid of your debt, there are different things that you may want to cut out. You could cut out Starbucks (I know, I know), lower your restaurant spending, find a cheaper way to workout, sell your car for something cheaper/more affordable, cook from scratch and so on.

There are many ways to cut down your spending. Below is a quick list for you to start with:

• Sign up for a website like Rakuten where you can earn FREE cash back for spending like how you normally would online. When you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
• Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first four weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
• Check out my recommendations page for a full list on money-saving websites.

4. Find a way to make extra money.

Making extra income is the main thing that helped me pay off my student loans so quickly. I worked like crazy in my spare time because I knew that I could make more money than I could cut out of my budget(don’t worry, I did do both).

There is a limit to how much you can cut, but you can always find different ways to make more money.

You could find a part-time job at a restaurant, retail store, and so on. You could freelance on the side. You could babysit, dog walk, sell your crafts and so on. The list is really endless for what you could possibly do.

Miscellaneous other things you should do:

• Pay more than the minimum.
• Put little amounts toward your debt. For example, whenever you get an extra $25 (such as by selling something), then you should just throw that extra money that you won’t miss towards debt.
• Automate your payments if you can’t force yourself to make payments.
• Put money towards debt right when you get paid so that you are “paying yourself” first.

How are you eliminating your debt? When do you think you will be debt free?