Ten Quick Easy Ways To Reduce Your Debt.

I get emails all the time from readers asking on quick tips on getting out of debt, so I figured I would put together a list of a few things I can recommend. However, keep in mind that while getting into debt is very easy, getting out of it is not. It takes work and effort, but the payoff is enormous. To jump start your efforts, try these 10 quick tips to start reducing your debt!

1. Stop using credit cards. Seriously. Put them away, freeze them in blocks of ice, hide them from yourself. Continuing to use credit cards when you are in debt is a recipe for disaster!

2. Call your credit card companies and ask them for interest rate reductions. I wrote my the Digging out of Credit Card Debt Challenge before and included a script to use when calling them. Do not yell or get mad if they say no; just call the next credit card company in your wallet.

3. If you work for an understanding company and are comfortable doing so, ask for an advance on your salary. I only say this because I did it once, and they were more than happy to give it to me. I paid off debt, and then had them take a little amount out of each paycheck until it was paid back. That way, I didn’t pay any interest at all to the credit card!

4. Check your deductible levels on your home, car, life, and health insurance. If you are healthy, setting those deductibles higher could save you hundreds a month. Same could go for the other types of insurance as well.

5. Be sure to compare deals and offers on things like cable, cell phone and internet service – you don’t want to have to pay more than you should. Especially with things like cable, as one call can lower your rate for at least 6 months. Go ahead, try it – give them a call and tell them you are thinking about getting rid of cable because of the expense. I almost guarantee they will offer you a promo price.

6. When you need them, stop paying for things you can get for free. There is free open-source software available called Open Office that replaces Microsoft Office, for example. For Windows users, check out Open Source Windows. For Mac users, check out Open Source Mac.

7. If you own your own home, have the electric or gas company come in and do a home energy audit. These are normally free, and they will be able to tell you where and how you are losing money by not being efficient.

8. Check your withholding amounts on your paycheck. Did you get a refund this year? That means you overpaid, and you could have had that extra money in every paycheck. Check with your accounting department at work on this one. Then, send the extra money to your credit card.

9. Make snowflaking payments to your credit card company. A few dollars a day paid every day to your debt can make a huge difference.

10. Finally, keep some money for yourself. If all you do is throw every penny at your debt while excluding doing anything at all for yourself, you will end up binging at some point. People who diet to the extreme almost always end up sitting on a couch with a bucket of ice cream at some point – they went for too much too quickly. Don’t let that be you!

Do you have any other quick tips to help those fighting the debt battle?

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Comments (17)

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  1. Will says:

    Solid advice. Can I chime in with my 2 cents on the subject? It’s much more lengthy, but I was trying to be quite thorough. It’s a nice complement to this article, though.


  2. Snowflaking to pay off credit card debt rocks — that’s what I do. People like my mom still think they need to receive the paper bill and send off one fat check for that month’s credit card debt. Instead, mine are all online and connected to my checking and saving accounts. That way I can pay it off little by little, and not feel the hurt of forking over several hundred dollars in one fell swoop.

    I have never thought of the option of asking an employer for an early paycheck. I can see some companies being more than happy to do that, but others, not so much. Just like my company ran a credit check on me before I started here, I’d be worried that they would be put off my my financial irresponsibility if I asked for an early paycheck (especially since my job is to write about personal finance). But if you’re in dire straits, that may be a nice option.

  3. #5 is great – I think a lot of people spend a lot more than they should on those kinds of things simply because they don’t think to look for deals elsewhere…they get their cable and stick with it forever.

  4. There are a lot of closed-source free programs as well. AVG Anti-Virus comes to mind as one of many examples.

    I don’t believe that everyone binges when it comes to money. I think many people get addicted to seeing that debt number go down (or the net worth number go up). To those people, that becomes more important the spending.

  5. Trent Hamm says:

    The key with some of these tactics that purely save money – like the deductible one – is to roll that savings immediately into debt repayment. Make it an automatic payment so you don’t even have to think about it.

  6. David says:

    You are so right Trent, I should have mentioned that. Any savings should, of course, be put towards debt.

  7. Matt says:

    Good List – I would never have thought to ask for an advance. Unfortunately this doesn’t always work. The smaller the company the harder it will be (cashflow tends to be an issue with small companies).

    Getting spending under control is the best way to stop the hemorrhaging of money once you’ve done that you can claw your way out of debt.

  8. David says:

    Yea, asking for an advance wouldn’t work for everyone, but smaller businesses might be more apt to do it because they know you – you are not a faceless employee in a sea of other employees.

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  11. Zee says:

    Great list! I just recently started looking for areas where I can snowflake and sent a small payment in just last week! It felt great – and I’m looking forward to finding more areas throughout the rest of the month!

    The only other suggestion I have is: create a budget and stick to it. If you don’t know how much you’re bringing in and/or what it costs for you to live, it’s hard to budget adequately for all the different areas of life. I would guess this may be one of the reasons people begin to live beyond their means: it’s just easier to stick everything on the credit card and deal with it “later.”

  12. david says:

    Very true, thanks Zee!

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  17. Asking for an advance is fine but normally employers collect it back the next pay. A cheap loan from your employer may be a better option.