Top 6 Ways To Get Out of Debt

by Debbie Dragon

It's certainly easy enough to get yourself into debt, but when it comes to becoming debt free most people struggle for their entire lives without every fully experiencing a debt free existence.

Here are 6 things you can do right now to increase your possibility of becoming debt free.


Try consolidating your debts if you have many accounts with small balances on them. It can be a nightmare to keep track of numerous credit cards and loan payments each month, which increases your potential for sending a payment late. If you are able to get a larger loan to consolidate all or most of your smaller accounts, you will have one payment to make each month. You can save on interest if the new loan has a lower interest rate than each of your individual creditors, too!

Try the snowball payment method. The snowball method has you pay all of your creditors the minimum payment except for the creditor that you owe the least amount of money to. On that account, you pay as much as you can to pay it off as fast as you can. Once the account has been paid off, you apply that accounts payment to the next account in line- and the payments you are able to send “snowball” bigger as you pay off each of your accounts. You do pay more interest using this method- but you can generate momentum- after you pay off your first account quickly, you are compelled to keep at it! To save on interest, you can use the snowball method of payment but pay your accounts in the order of the highest interest account first!

Use automatic payment scheduling. Many credit cards and loan companies allow you to schedule your payments to automatically be paid from the checking or savings account of your choice. There may even be an incentive for doing so, like a lower interest rate or other discount since it's less work for the billing department. By doing this, you don't have to remember to send the payments out on time and you save on the cost of the stamp. Take it a step further, and schedule your payments on a weekly basis rather than monthly, and watch how much interest you save!

Pay your mortgage bi-monthly. As long as your mortgage company does not have a prepayment penalty, you should consider sending bi-monthly payments instead of one monthly payment. Just be sure that your mortgage company will apply the payment when you send it, and not hold it until the end of the month. Sending two payments each month doesn't mean you have to send extra money if you don't have it to send, but by simply dividing your regular monthly payment into two payments rather than one lump sum will save you a considerable amount of money on interest and therefore pay off your mortgage faster. If you get paid bi-weekly, this is how you should pay your mortgage payment. You'll end up paying 26 half-payments each year, which means you end up paying an extra mortgage payment each year without really noticing!

Reduce unnecessary spending. In order to increase the amount of money you have each month to make it possible to pay more to each of your creditors, you should look for ways to reduce unnecessary spending. If you're buying a coffee three days a week on the way to work, consider making it at home instead and save $2 a cup. It doesn't seem like a lot of money, but over time it does add up and can help you pay down your debt quicker.

Consider a part time job. If you are really serious about paying off your debt, you might consider getting a second job. Keep in mind- if you have to travel all over the place to go from one job to the next; you probably aren't going to make enough to offset the expenses involved in the traveling. But if you're able to find part time work online, including ebay, writing, making posts on forums- or whatever skills you may have- the money you make can be applied directly to your creditors as additional payments.