25 Ways To Get Out Of Debt And Rebuild Your Future

Drishti Choudhary
July 18, 2023
How To Get Out Of Debt?
How To Get Out Of Debt?

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In the day and age of globalization and capitalism, one thing that is common is ever-growing costs for even necessities. And what happens when out-of-pocket expenses go over the top? You get into debt. Aren’t your credit card bills too heavy on your shoulders?

Getting invoices for items purchased months ago seems like a nightmare. But there is always a way. And if you are determined enough, you could break the cycle of your debt and use all that money from your paycheck for your present needs and wants.

Becoming debt free isn’t a one-day process. And though you must aim to be debt free as quickly as possible, it is okay to take one step at a time.

There are numerous tips to being debt free, which are discussed further in the blog.

However, here are some general guidelines to remember to get out of debt.

General Guidelines

You might want to set a timeline. You can set a date or the end of the year as your goal date.

It might seem difficult but a lot could be done in two years.

So, if you start with your debt free life goal on 1st August, 2023 try and focus on ticking off as many steps to pay off debt as possible by 1st August, 2025.

Take Your First Step Towards a Debt-Free Future

Setting a timeline requires a plan. A plan to be followed, to pay off debt completely and in the least time possible.

Planning beforehand helps you organize and guides you in the right direction as you move forward.

Planning your way out of debt can help you select the right method and save as much money as possible.

Further it is imperative to understand what kind of debt you have.

Knowing the type of debt helps you come up with an appropriate plan to achieve your goal to be debt free within a decided timeline.

Below is a table describing the types of debts.

Types Of Debts

Debt Type Description Interest Rate

Loan Resulted Debt

  • Loan for house with mortgage
  • Auto Loan
  • Student Loan
  • Loan for business

Manageable interest rates

Emergency Resulted Debt

  • Medical emergency loan
  • Divorce induced debt
  • Unemployment induced debt

High interest rates

Spending Resulted Debt

  • Credit Card debts
  • Personal loans
  • Overspending induced debts

Very high interest rates

Lastly, the general guidelines for becoming debt free requires you to understand your credit score, your amount to be paid, manage your debt etc. And it might be that you know little about doing the same.

If so, you can take credit counseling.

Credit counselors from non-profit agencies like the national foundation for credit counseling and financial counseling association of America.

Safety Net

This fund is of no use until it’s an emergency. Keep your hands off it.

Safety net is the money you keep aside for emergencies. This fund doesn’t have to be a lot but it should be enough to get you out of an emergency.

Another kind of safety net is not creating more debt. Do not take more loans to pay for your previous ones.

Do not enter into the debt spiral, where debts never end and you keep on paying.

Avoid personal loans for things that aren’t so important.

Snowball Method

Before we get into the business of 25 ways to get out of debt, let us understand the snowball method of paying debt.

It is one of the methods that actually works and many people have paid off their debts with this method in two years time.

The method is simple: you list all your debts to be paid. Select the least of them all, contribute higher amounts to this debt and minimum to others.

Once you pay this small debt move on to the second smallest debt and continue till you pay off the largest.

For instance – suppose you have four debts to be paid.

  1. $400 for a pizza oven
  2. $1000 for college books
  3. $5000 for refrigerator
  4. $10000 for medical bills

Using the snowball method, you should pay the most amount to your smallest debt, which is the pizza oven, and then move on to college books once that debt has been paid off. And with this method, you would have paid your entire $16,400 debt in no time. 

Let’s cut to the chase and move on to 25 ways to get out of debt.

25 Ways To Get Out Of Debt

1. List Everything

To devise a plan for your debt-free future, you need to carefully note down everything that is to be paid.

This includes personal loans, auto loans, credit card balances, student debt, mortgages etc.

Noting everything down helps you organize and devise a plan better. You can also use sites such as that to check your updated credit report.

Along with the debt put in the interest to be paid, minimum monthly payment and due date of the loan.

Add up the minimum monthly payments of all your debts and calculate the total payments to be paid every month.

This listing will assist with the next step.

2. Create A Budget

A budget helps you get a clear view of your income and expenses.

By creating a budget, you can decide how much money to spend on what activity.

When you have a list of your debts, it is easier to allocate your monthly income to them as per the snowball method.

A budget might help you reduce wasteful expenditures and save more every month.

You can use the zero-based budget method, which lets you allocate every penny to saving, spending or paying debt with it.

You can use apps like cleoEvery Dollar to make the most efficient budget.

3. Paying Every Month

After you have created a budget, it is imperative to know how much you can allot to pay your debt on a monthly basis.

You might want to make more than the minimum payment every month to avoid interest payments. It is possible if you do it smartly.

You can start by comparing your income to your expenses. When a budget is prepared, you will know if your expenses are out of pocket.

You can then cut down on such expenses. This can help you get out of debt quickly.  

For instance, if your income is $10,000 each month but you create a budget and find that you have been spending more than $5000 on things like movies, parties, eating out etc, this needs to be cut down to save more.

4. Side Hustles

Another way to pay more is by earning more.

Along with your regular job you could try out some side hustles like working on weekends, working freelance, starting your own small-scale business etc.

For instance, a freelance social media manager earns around $50/hour. Even if you only work weekends for 6 hours, you will earn an extra $600 every weekend.

With 4 weekends every month that would make up to $2400 every month. This is not a small amount when repaying multiple debts.

5. Sell The Car

Selling the car you purchased might help repay debt. There are two benefits.

First you will get money by selling the car which could be used to buy a second hand inexpensive car with saving more than a thousand dollars directly.

Second it is found that the latest car entails a $667 monthly payment. This could be added to your debt repayment.

6. No Credit Cards

It might be a good idea to shut down your credit card accounts to stop taking loans. Credit cards allow us to purchase things we don’t need.

Cut them if you want. But do not spiral into debt. How can you be debt free if you keep on depending on credit cards?

7. Hard Earned Cash

Have you seen memes online indicating how irresponsibly dependent now people are on online payments? Guess what, it is just another way of business owners to make you consume more and spend more.

Try paying in cash. The more money you feel (literally) going away, the more conscious you will be of your spending and thereby save more, this can help you to get out of debt quickly. 

Pro Tip: Your credit score must be 750 or more to make you eligible for loans or debts in present times.

Build credit with every bill you pay.

8. Do Not Compare

Have you heard the saying ‘grass is always greener’?

We always believe our neighbors to be living a well-off life and want that for us too. But this just puts us in a very bad state on our debt stance.

So, stop copying a lavish lifestyle and try to save more and put that money into debt repayment.

9. Inform The Kids

If you have kids, it is better to make them understand about your debt repayment plan. And that this plan would also require some effort from them.

Explain to them what your new debt repayment budget can afford and what it can’t. And of course, you can always say NO to them.   

10. Smart Spending

It is important to know what are essentials that you need to spend money on and what are leisure items that can be avoided being spent on.

When on the track to pay off debt, it is vital to spend only on essentials.

Necessary items or needs may include – rent, food, transportation, child support, health insurance etc.

11. Insurance Coverage

If you can afford to buy insurance at an early stage, go for it.

Although as suggested, you could keep money separately as an emergency fund, but buying insurance for the family will let you have more proportion of your income towards debt settlement.

The earlier you get, the lower your premiums would be. Even in times of increasing healthcare, you could actually save more via insurances, this can help you to get out of debt quickly.

12. Consolidating Loan Payments

It might be difficult to keep track of your different loan payments.

You might consider consolidating all your debt payment into one. This will help you to pay one time in a month, keeping track of which would be easier. 

Pro Tip: There is an option of consolidating loans and is also available for personal loans, credit card loans, home loans. This brings with the opportunity to pay lower interest rates. But this should be avoided. Bearing the balances of 4 or so credit cards and looking at zero balances can be tempting, but ultimately it will put you in more debt than you were before.

13. Know The Difference

It is important to know the difference between good and bad debt.

Mortgage loans can be considered as good debt. They let you have a roof over your head, while helping you to accumulate wealth over time and ultimately paying your mortgage loan.

But credit cards are definitely one of the worst loans. Not only do they have high interest rates but they also ruin your spending habit, making you dependent on loans forever.

It could even put you in the habit to spend when it’s not even needed.

14. Coupons And Deals

Who doesn’t like to save even a few cents by those coupons and some percent off deals. It is good to save money. But make sure when you use those coupons you use them on items you actually need.

You go for products that offer for instance 10% discount only when you need. Or else you might end up spending on items of no use, this may slow your process and get out of debt quickly.   

15. Batch Shopping

If you have kids, you would know how quickly they grow. And to save money on their clothes would actually help you.

Try buying from consignment stores in your areas which offer clothes in good condition.

There are online websites for consignment shopping like thredUP and Swap.com for both adults and kids.

Pro Tip: Tracking your credit score is important, to maintain a good credit score. After repayment of your certain loans, make sure your credit score is up to the mark and there is no discrepancy.

16. Eat In

You can always find ways to save more. Like instead eating out every day, maybe cooking on some days, or avoiding buying useless and expensive stuff for time being.

As per research an average American spends around $300 every month eating out. This even if reduced to $200 could bring in extra $100 for your debt payment. 

17. Do It Yourself

If you have any house help, let them go. Although it isn’t easy for all, but instead do your own work.

You can save a lot on household chores and small repairs, if you do them.

For instance, you can save $75/hour on simple household repairs, $15/hour which amounts to $31,200/year on lawn mowing and another $40 or so an hour on car washing. 

Imagine how quickly you could get out of debt if you save all these expenses.

18. Grocery Shopping List

If you go into a supermarket with no list, you end up buying things that you either don’t need.

Create a list and stick to it. Do not diverge from the list. Making lists helps in saving time, energy and especially money.

You can get all you want in one ride to the store, saving money on gas as well.

19. Try Cheap Hobbies

Maybe golfing is too expensive when trying to get out of debt.

Save those $200 every month and pay off your debt early and then golf with no debt. Avoid buying expensive stuff just for the sake of it.

Everyone does need some hobbies to refresh themselves. But maybe, instead of golf try baseball with your kids? Or soccer with your mates?

Maybe start a book club with your reader friends?

Pro Tip: After you have repaid a loan, make sure to get a no-dues certificate. This certificate would be the surety that you have settled that loan. If that loan was securitized, make sure to get the promised collateral back.

20. Stay Fit For Free

Are you one of those people who buy a gym membership in the hope that you would value the money and go to gym? Well, try and stay fit with no money involved until you pay your debt.

Go for a run, play a sport, do online yoga, but cut off that gym membership.

For instance, it was found in a research that on an average it is more than $50/ month for gym membership. And if you are a couple, it is almost $100/month, but isn’t it better to put that money in debt repayment, at least for a while? 

21. Sell Belongings

If you happen to have stuff that is still usable, but you wonder what to do with it? You can sell such items either online or offline.

You can look for things that are of no or very less value to you and sell them on Facebook or craigslist or via garage sale, this can help you to get out of debt quickly.

22. Say No

Say no to everything that might become a burden on your debt repayment goal. Do not spend until, it is a necessity.

Say no to other members of the family for spending without thinking. Add every penny towards debt repayment.

For instance, you might want to spend some $60 on buying Harry Styles’ “treat people with kindness” hoodie.

But think for a moment, will he ever go out of style? Will he ever stop selling it?

But can you go into more debt? Can you stay in debt forever? If you know the answer, just don’t buy it.

23. Credit History

It is important to verify your credit rating and evaluate your credit report for any mistakes.

Keeping track of your payments, continuously checking for if there is any delay in payments etc, can help in better organizing your debts and help you get out of debt in a more quick and planned manner.

There are various websites like EquifaxTransUnionannualcreditreport.com, or Experian that can get you your credit history.

You are eligible to get your credit report once a year.

Pro Tip: Credit report assists in understanding the impact of your debt on your credit score. It is smart to go through your credit report once in a while to notice any late payments, or credit utilization ratio.

24. Debt Settlement

It might not be as easy as it looks, but there is a way to settle your debt.

The method known as debt settlement helps you to ask your creditors for help.

If your condition on the debt repayment front is very poor, you may ask the lenders to reduce your debt.

This reduction comes in exchange for agreeing to pay a share of your remainder.

For instance, if you have a debt of $10,000 from one of your lenders and you go for a debt settlement strategy, your lender might agree for 60%.

This means you would have to pay $6000 altogether, in exchange for leaving $4000 off completely.

The downside of this is that it hugely affects your credit score negatively. This debt settlement will come up in the form of extremely negligent payment or paid off credit card debt.

25. Bankruptcy

This is one of the last and least solutions to your debt problems.

It is better to follow other steps provided in the blog to avoid this situation from arising.

If required you can even consult a debt or loan advisor, before filing for bankruptcy.


Repaying your debts may sound like a lot of work, so much so that it might even seem impossible when you first embark on the journey. But the trick is to make a budget and follow the repayment plan.

These 25 ways on how to get out of debt along with some cautions and pro tips will bring you desired results.

Options like loan consolidation or bankruptcy is something that should be the last of last resort.

Creating debt repayment milestones may assist you to stay focused and motivated to get out of debt.

Here at Penny Calling Penny, our save money blogs are only a part of our growing library.

We’re dedicated to helping you learn to manage your money, no matter where you’re at on your financial journey.

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