How to Get Out of Debt 7 Tips to Get Out of Debt that Work

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How to get out of Debt 7 Strategies That Work
Find ways to earn more money, consider debt consolidation, and find out what motivates your payoff goal.
By Jeanne Lee Jeanne is a former writer at NerdWallet who focuses on credit, debt and loans. She has covered financial topics for more than 20 years, with stints with Fortune as well as Money magazines.




And Sean Pyles Senior Writer | Personal finances and credit Sean Pyles leads podcasting at NerdWallet as the producer and host of NerdWallet's "Smart Money" podcast. The show "Smart Money," Sean talks with Nerds from NerdWallet's NerdWallet Content team to answer the questions of listeners about their personal finances. With a focus on shrewd and practical advice on money, Sean provides real-world guidance to help people improve in their finances. In addition to answering listeners' money concerns on "Smart Money" Sean also interviews guests outside of NerdWallet and produces special segments on topics such as the racial gap in wealth as well as how to get started investing, and the history for student loans.
Before Sean was the host of podcasts at NerdWallet the company, he also wrote about topics related to consumer debt. His work has appeared throughout the media including USA Today, The New York Times as well as other publications. When Sean isn't writing about personal finances, Sean can be found working in his garden, going for runs , and taking his dog for long walks. Sean is located within Ocean Shores, Washington.





May 28, 2020


Editor: Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. In the past, she worked for 18 years working at The Oregonian in Portland in capacities such as chief of the copy desk and team editor and designer. Previous experience included news and copy editing for several Southern California newspapers, including the Los Angeles Times. She received a bachelor's degree in mass communication and journalism from Iowa's University of Iowa.







The majority or all of the products featured here come from our partners who pay us. This impacts the types of products we feature and where and how the product is displayed on the page. But, it doesn't affect our opinions. Our views are entirely ours. Here is a list of and .



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Table of Contents





Being debt-free is something you are able to do yourself using all the tools you need and the motivation.
Learn from those who have been there. The people featured in NerdWallet's series took on thousands of dollars in debt by employing innovative strategies and daily tricks that help you make the most out of your money, using extra payments and knowing how to stay motivated, among other strategies.
For inspiration Here are seven suggestions from their stories and steps you can take on the path of your own.
Make the most of every dollar


Do it yourself: Building a budget is key in any budget, however, especially in the case of paying off your debt.
NerdWallet recommends that you Keep the essential expenses, such as housing, to half of income. Also, allocate 30% to wants, and use 20% for savings and debt repayment. As you're trying to pay off debt, you could choose to make use of funds from your wants category to pay extra debt. That will wipe out debt quicker and also help you reduce interest costs.
Once you've established the budget, you can track your performance. You can set yourself up to be successful by . You can alter your budget as needed.
Be inspired: wanted swap her tech job to a career in food and cook, however $64,000 of credit card, student loan as well as credit card debt were holding her from pursuing it.
Stiavetti's approach was to use every cent she earned towards paying off debt. "I nevertheless went out with friends and enjoyed some time off, but I did so with an eye toward spending within my budget and discovered ways to get the most of every penny instead of indulging in expensive luxurious items," she says.
Find a side hustle


Take on the challenge yourself: Think about any skills you have, such as web design or coding, that you can offer to earn additional cash. There are other side jobs you can pick up from your home, such as selling your old clothes online or renting out a room through Airbnb.
If working an additional job is exhausting, consider a short-term stint to earn enough for the extra payment towards debt. There are a few things to think about.
Be inspired: At the age of 23, she had earned three degrees from colleges, a new husband and a home in Missouri and $38,000 of student loans. She set out to pay it off as fast as possible.
Her strategy? Make more money. "Cutting your spending is wonderful, but there's only so much you can cut," she states. "You can always look to make more money."
Alongside her day job, Schroeder-Gardner ramped up her side hustles like blogging, selling items from around her house, taking surveys, and working as a mystery shopper.
The long hours , which can be up to 100 per week -- was hard. However "just being able to watch my debt decrease kept me motivated, because I could see the end goal," she says.
Make sure you align your spending with your values


Be yourself and avoid getting into the big-spender category by paying attention to yourself falling behind on savings goals, or buying things because of boredom and violating the rules of your spending, you might be overspending.
But you can break the cycle by building a good budget, analyzing your credit card bills and working to build new habits, such as cooking at home and not eating out.
Get inspired: Like many others, Lauren was trying to keep up the "appearance of having it all," and her husband, Mark, bought an expensive house, drove luxurious cars and spent freely. When Lauren discovered that she had hidden the cost of $600 worth of clothes from her husband she confessed that the expenditure was way out of control.
"I racked up $40,000 worth of debt on my husband's back and was feeling so much shame," she says.
In addition to reducing the size of their lifestyle, the Greutmans had a breakthrough as they evaluated their spending in light of their values. Lauren's suggestion: Make your list of all the things you value in your life, and make a list of all your expenditures in the last month. If the lists don't match then make sure your spending is in line with your ideals.
Use the power of extra payments


Do it yourself: Use the calculator to see how extra payments can cut down on the amount you pay off.
The extra monthly payments you make on your debt can also lower your credit score, which can in turn improve the credit rating of your.
Get inspired Get inspired: There is no amount of debt that is too much for you to handle . When her debt hit $147,000, including a car, mortgage, student loans and credit cards, she was obsessed with paying it off -the entire amount.
The majority of her efforts were based on paying extra money towards her bills. "I became consumed with the repayment of my student loan. I also earned moneyvia online surveys, writing freelance and odd jobs found on Craigslist to ensure that I could afford small installments," she says. "I discovered how fast I could get completed each time I put an even tiny amount."
Rely on your own


Make it your own: Could a side business give you extra income to pay off debt? Explore your interests and how you can create a modest company out of them. An animal lover could open an online grooming business for example or a writer may pick up some freelance work.
Take a look at these .
Find inspiration: After a divorce, faced $14,000 of car loan and credit card debt. It was the amount which led to the decision to improve the financial circumstances of her.
"I was on my own for the first time in my life , and ... could barely get a decent place to live in. There was no one to help me get out of this money hole, so I decided to do something to help myself,"" She says.
Nicholson took a second job in a tax office working on weekends and nights and living on two-thirds her earnings. "During tax season, I was working all week long, without any vacations or time off. It was tough, but I had an ambition to become debt-free by the end of the calendar year," She says.
Since becoming debt-free, Nicholson continues to lean on herself, managing a blog that provides her primary source of income.
Think about consolidating


Do your own research: Discover more about and whether it is a good idea for you. You might be able to use a or a to roll several debts into one with a lower interest. Note that you'll likely need to have a strong credit score in order to qualify.
Find inspiration: When he was forced to decide whether to pay his rent or his charge on his credit card in the 20s, he was feeling enormous guilt. "After years of carrying obscene amount of debt, this was my first experience that in my life that I could not meet a payment obligation," he says.
To take care of his $80,000 in student loan, vehicle loan as well as credit card balances, Weliver set up a plan that included debt consolidation. His credit union gave him a low rate loan for approximately $5,000. He was able to get another loan for $12,000, at a favorable interest rate, to pay off his high-interest credit cards.
"I did the fixed personal loan payments, and what remaining was put towards those higher rate APR cards, which I paid off before the lower-rate cards," he says.
The strategy eventually ended up paying off. "I was successful in paying off my debt in less than three years" Weliver says "and I'm very glad I was able to get out of debt at the point in my life that I was at."
>> > LEARN the relief options available to Canadians
Know your 'why'


Do your own research: Consider your financial goals in the near and long term. It doesn't matter if you're searching for a new home or saving for a vacation A clear goal to pay off debt can help you stay on the right track.
Find inspiration or perhaps the answer to your "why" by reading stories from other authors.
Find inspiration:'s debt epiphany came about in 2010 when he told his family there was no time for a vacation that year. Instead it was time to face $109,000 in debt, including five maxed-out credit cards.
The Brandows set up a budget, cut expenses and eventually becoming debt-free after 50 months of repayment. Brandow's children were the motivation he needed to remain focused on debt repayment.
"I wanted to not be a burden to my parents," he says. "I wanted to do my best for them.
"You'll need to have an underlying reason for wanting to be debt-free, because it's going to be hard. It'll require sacrifice. It is important to be mentally prepared. A 'why' can keep you focused."



About the authors: Jeanne Lee is former personal finance journalist for NerdWallet. She previously wrote in Fortune and Money magazines.


Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. His writing has appeared on The New York Times, USA Today and elsewhere.







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