25 Debt Reduction Tips For Your Immediate Action Plan

by David@MoneyNing.com · 73 comments

crossed out debtWith credit cards so convenient, loans so common and debt socially acceptable, getting into debt is extremely easy. I still have vivid memories of the two people who sold me on my college credit card. It had the school logo on there and best of all, it helped the school every time I use the card to pay for a purchase. How cool is that?

Get Out of Debt Now with These Tips

Avoiding debt is an advice most don’t appreciate until they are swamped with bills and obligations. For years, many just pay the minimum payment on their credit cards and think of their house as an ATM machine.

Now that the economy is deteriorating and people are worried about their jobs, everyone is finally thinking about debt load. If you are concerned about all the loans that you need to pay off, use the time you are worrying and spend some time implementing the following 25 tips to reduce your debt instead.

  1. Focus on the Prize – Motivation is key to succeeding with paying off your debt. Get a Post-It, write down your total debt and tape it on your computer monitor. Seeing the number go down is a huge motivator. Some people like to instead motivate themselves by looking at the reward (perhaps a picture of your happy family to remind you how relaxing being debt free can be). That works just as well.
  2. Debt Snowball – Some like to pay the highest interest rate first and others like to pay the smallest loans first. Whichever method you choose, debt snowball works because you are concentrating on one loan and the psychological benefit of paying them off helps tremendously.
  3. Get a Side Job – You are afraid of your job but how many of you are actually trying to get another job in this economy? Whether it’s building up some form of passive income or getting a part time job, side hustling is still the quickest way to make more money.
  4. Freeze Your Credit Cards – I personally think credit cards are great because of the rewards you earn but the plastic cards are clearly not for everyone. If you have a hard time keeping yourself from splurging, just freeze them.
  5. Have Constant Reminders – Reducing debt is a long journey that takes discipline. Whether it’s setting reminders on your calendar or setting an alarm on your phone to alert you to pay bills, anything you can do to trigger your mind about your path to financial freedom is encouraged (and sometimes necessary).
  6. Have a Regular Meeting About Debt – Schedule a monthly meeting with your family and figure out how to save more money and pay off your debt more rapidly. In the meeting, talk about your progress, dream up ideas and make some point form actions for the next 30 days.
  7. Take Ownership – The most important step in becoming debt free is taking responsibility. The credit card companies may have encouraged you through the years to limit your spending but it’s ultimately you who racked up those charges. Stop complaining and start doing something about it.
  8. Understand That This is a Problem – No company is ever going to keep lending you money forever and ever. Stop wishing that the problem will just go away by itself and start dealing with the situation. Debt is a problem. Start reducing what you owe immediately and stop thinking that you should drag it out infinitely.
  9. Learn the Power of Compounding Interest – I imagine that people who are in debt don’t really understand the essence of compound interest. Remember all those charts that show how interests compound when you invest? When you are in debt, this is just in reverse.
  10. Read the Fine Print – The majority of us don’t really pay attention to the fine print when we take a loan or apply for a credit card because those details are confusing and boring to read. Considering how much the detail can affect us (for examples, just look at all those people with rate adjustable mortgage rates), it might even make sense in some cases to hire someone to read and explain everything to you. Take some time to understand those documents and save yourself from a possible disaster.
  11. Mind the Small Fees – There’s no question that small fees add up. Couple bucks here, several meals there and you are looking at thousands and thousands of dollars each year. Every penny counts. Save them up and use it to repay your loans.
  12. Paying Minimum Payment Sucks – Everyone just paying the minimum amount due would be a dream come true for credit card companies. Do you really want them to make money off of you?
  13. Don’t Always Upgrade Your Lifestyle with Income Increases – It’s so easy to instantly upgrade your lifestyle whenever your income increases. Getting a raise or a promotion is such a happy event so even though celebrating is good and well deserved, imagine what you can do to your debt repayment schedule if you put those extra dollars at work.
  14. Start a Budget – People don’t budget because the task is boring but it absolutely works. Knowing where your money is going is the first step to figuring out how to save more money. More money saved, more money to repay loans.
  15. Don’t Keep Up with the Jones – When all your neighbors and friends are buying new cars and going out to fancy restaurants, it’s hard to just say no. However, which would you choose? A miserable retirement or a comfortable one?
  16. Fancy Doesn’t Mean Better – We’ve been taught to equate price to quality. If something is more expensive, it automatically means that it’s better right? You know what’s really better for you? Be debt free, that’s what.
  17. Send Micro Payments Instead of a Big One – Some loans compound daily (read the fine print to find out which ones, or you can always call and ask) so the sooner you can send in payment, the better. Instead of sending money once a month, try sending in smaller amounts whenever you have money to save on interest. Also, look for ways to cut down the delivery time. For example, online bill pay or online payment might be faster than mailing out a check, which cuts down the interest further.
  18. Consolidate Your Debt if Possible – Unless you can keep up with all the bills, sometimes it’s just easier to consolidate your debt. It might make sense to take a home equity loan for example to pay off all the different credit cards and auto loans if the interest works in your favor, not to mention that it’s much easier to manage one loan instead of six.
  19. Sell All the Stuff You Don’t Need – On ebay, craigslist, or anywhere you can. In addition, record the purchase price, selling price and the difference. Add up all the difference and you will know how much you have spent for temporary owning all these products. Now, tell your family that number.
  20. Credit Cards are Loans – The purchasing power of your credit card is not the same as cash (Even 0% balance transfer credit cards may come with a cost). Drill it in your head that using your card is borrowing money that needs to be repaid.
  21. Ask for a Lower Rate – Don’t be afraid to call your loan company up and try to negotiated. There is no shame and there is nothing to lose. Tell them why they should lower your rate and you might just succeed.
  22. Success Breeds Success – Start hanging around people with the right mindset. Tell your friends who don’t share the same values to stay away. The right support system will help you accomplish your goals much faster.
  23. Keep Trying to Trim Your Bills – Be persistent because there are always more ways to save money. Always.
  24. Make a Plan – The great thing about having a plan is that you get to see progress. I love it when I make a To-Do list and start crossing things out and I’m sure you will enjoy doing it as well.
  25. Find a Debt Reduction Buddy – The idea is the same as having frugal friends. Accountability and encouragement will go a long way in helping you on your path to become debt free. Find a buddy and help each other reduce your respective debts. Have another monthly meeting with him/her, share this article, talk about ways to save and inspire each other to be financially free.

Get started today.

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{ read the comments below or add one }

  • mamaligadoc says:

    With respect !!!

  • Daniele says:

    I need to pay down debt

  • Sam says:

    I need these, hence I take down notes. Thank you for the guide on debt reduction.

  • JJ says:

    Here it is July, and I’m still no closer. I hate to sound paranoid, but has the aforementioned former tenant’s lies spread this far? I’m getting nothing yet so far as babysitting is concerned. Occasionally my friend two doors from me will have me take care of her dog for a few hours when she goes in to have a medical procedure; and with my friend next door, I take care of her dog when she’ll be gone for the day, or several hours when it’s hot and she won’t leave him in a hot car, but they don’t pay me. I’m not sure I should ask for pay, or just keep doing it as a favor. Suggestions?

    • k says:

      I don’t know if you could ask to get paid, if you don’t drive you couldn’t get their animal anywhere in an emergency, which would be the main reason I would actually HIRE someone to watch my animals (my dog had life threatening emergency while we were on vacation and the pet sitter went above and beyond to care for her, taking her to the vet and visiting and sending us videos until we could get home). I think if they’re friends, they shouldn’t have to pay you, you’re doing them a favor, as long as they get you back with a favor if you need it!!

  • JJ says:

    I’m still waiting, and looking for ideas on making some money. I still haven’t come up with any solutions except to try to sell all I own—but that will never do. One: what will I wear, use for furniture, etc.? Two, nobody wants to buy a thing for what it’s worth anyhow. Three, I will not sell my beloved books! They might not bring in any money, but to avid readers, books are valuable. Any suggestions? Please, just remember, all recommendations must be legal or they won’t even be considered.

  • Linda says:

    Has anyone thought to put out an ad to house sit or pet sit or babysit?
    It is sometimes cheaper to have a house and pet sitter and you get a vacation
    out of it. I get flown to California and have a home with a pool and hot tub and really nice neighbors for two weeks. Some people earn money at this. Also you
    could be used as a babysitter too. Take kids to school, classes, etc.

    • JJ says:

      I love to babysit, and I’d do anything for children. I’d protect them, at any cost, from harm of any sort. I’d try to guide them to know the Lord Jesus, who dearly loved children. However, where I live, a former neighbour fixed that for me by spreading lies through e-mail one weekend when she was half drunk. Now the parents here don’t trust me. People here who have dogs mostly have caregivers, who also walk their dogs. Nobody needs a house sitter, although I’ve done that too. I’m a non-driver, so I can’t take children to school. Any other suggestions? I’m open to almost anything legal. Lol????

  • JJ says:

    I use filtered water, because I’ve got two Brita pitchers; hence I needn’t buy water unless I choose to for some reason. For me, though, there is one problem with having a membership to Costco, etc.: I’m a non-driver by necessity. The nearest Costco or Sam’s Club is 40 miles away, at least. As a result, a membership won’t work for me. It’s an excellent idea for somebody who can drive, though.

  • Tommyguns says:

    I didn’t see a membership to BJ’s, Costco, etc. Ex. I spent 5.49 for 15 bottles of water. At my local grocery store it would be 15.00.
    Sandwich baggies, bread, detergent, meat, it goes on. A $40 membership saves me hundreds. Also, gas prices are abt .10 cheaper a gallon every fill up.

  • K. Scott says:

    Ask a not-profit credit counselor for help. They dis review your budget and provide tips and advice over the phone and it is completely free. Check it out at http://www.AICCCA.org

  • Salalaw says:

    While I like most of the advise on this list I have to object to the consolidation portion.
    Consolidate Your Debt if Possible – Unless you can keep up with all the bills, sometimes it’s just easier to consolidate your debt. It might make sense to take a home equity loan for example to pay off all the different credit cards and auto loans if the interest works in your favor, not to mention that it’s much easier to manage one loan instead of six.

    If you can get another personal loan (usually 9% or so and much less than credit card rates but not auto loans) then I agree with the idea of consolidation and have done this once myself. You save on hassle and almost always will pay less in interest and not be buried in debt as long.

    However I find significant fault in the comment that it may make sense to take out a Home Equity Loan. Please be careful if you decide to do this. Understand, your credit card debt is unsecured. If you have a tragedy and can’t pay the companies can take you to Court but until there is a Court Order there is nothing securing those debts (thus the high interest). A Home Equity Loan is better known as a second mortgage. What you have done is give someone a secured loan, they now have a loan against your house, if you fail to pay they can attempt to foreclose your house. Always be careful when taking this as an option as you have much more to lose if you in the end cannot pay the loans back.

  • Karima says:

    Great article! I found helpful for me the following:
    Make a Microsoft Excel spreadsheet with the name of your debt, the APR, the amount you owe, deadline for monthly payment, and the expiration date for promotional APR if applicable. Every time a payment goes through, put the new balance in, and the total debt is automatically recalculated.
    It is very visual, it gives you great satisfaction to watch your debt reduce (positive reinforcement), and you always know what you need to pay first and how much.

  • Jeremy says:

    As a debt adviser I’ve seen some sorry people, people need to simply control their spending and attitude towards spending money. If you have debts, you should focus on clearing those debts. If you can’t pay for something without taking out a loan or getting it on credit, don’t get it!! It’s that simple.

  • Jose Nieto says:

    This is a great, if not classic, post. All of the tips on here are very valid and I think that if anyone follows even half of them they’ll be on a good course towards eliminating their debt. I’ll definitely be referring to this post when I write further posts on my own blog about debt elimination.

  • jak says:

    Cut your phone data plan and buy pre-paid plans, such as the 10 dollars a month prepaid card from T-mobile. Cut your cable! Buy an antenna and watch free 60 minutes shows on CBS, and read books!

    • JJ says:

      Part of your suggestion is what I do already: read. I’ve been an avid reader ever since I started reading well, probably because I’m from a family of bookworms. Thanks for reminding me—I can always read all the more! (-:

  • Tanya Smith says:

    This was such a great list of things to do – quick action items are always best and I love lists. Just wish I’d known much of this earlier in life. I’m going to share the article with my 10 year old today!! (and we’ll do a review every year until she gets out of college) 🙂

  • Caite says:

    I like the buddy concept, I have “Suze Orman”s app. and Debit cures (Book) but never heard of Budding up, so I’m in. Thanks.

  • Sandra says:

    Now if we could only get our government to follow these tips!

  • Debra says:

    I think the most important to start with is to be honest with oneself, one’s spouse and entire family. Debt affects all members of a family, and there is nothing wrong with telling your kids that your family is having financial difficulties or want to pay off all of our debt as soon as possible–you don’t have to harp on it; just let them know how important the project you’re tackling could use their help. It is a serious subject and honestly is paramount, but making a game of who can spend the least amount of money every week, merits a gold star. When enough are accumulated, take ’em out for an ice cream cone.

  • Todd says:

    I married a frugal person and it has made all the difference. If you’re considering getting married, make sure you’re on the same (frugal) page as far as finances are concerned.

    • HTL says:

      This is probably one of the best thing that can take away lots of hassles in paying off debt/money management if you can still do it. Unfortunately, it is too late for me. :). But I try to persuade my other half to think the way I think and be frugal to pay off our debt….

  • C MORROW says:

    Anyone having money issues should do this task first – start a money diary and every penny that is spent in that house hold must be written down for at least 1 month, just to get a clear snap shot of where your funds are going. We found ours was disappearing into lottery tickets and the gas tank of my husbands truck that he drove because it made him look good. With a clear picture in mind we sold the truck and bought a small economy car and limited our lottery ticket spending. Guess what? We have traveled the world, have a nice home and rental property and a good retirement as a result. So figure out what are your money pits and work together to solve them and you too can be the millionaire next door.

    • AJ says:

      C Morrow,

      Great advise and wonderful that your husband was able to let go of the status symbol. Congratulations.

  • Wes says:

    @ JvP

    #25, i believe, is the “Get started today.” comment.

  • Wes says:

    You forgot one very important point. CELEBRATE THE SUCCESSES!

    Example: when you use the “snowball effect”, make sure to treat yourself for each debt paid off. If you do not provide yourself with the positive reinforcement it is easy to fall back off track. This is not to say go get back into debt, but keep that ONE payment to celebrate with, then apply it to the next debt.

    You can do this everyone!

    Sincerely, a debt free individual!

  • Cody says:

    I hate to say, but the stuff about asking for a lower interest rate never hurting is total bunk.

    The last time I called up my CC company to ask about disparate rates (one card was 9%, the other 20!) and if they could do anything about it, I was put on hold 4 times, dropped once, transferred at least 3 times, until I finally got to an ‘account specialist’ who, after asking about my job, income, etc. told me that A) not only could he not do anything about the interest rates but B) he was dropping the limits on both cards to within 100 dollars of the current balance (resulting in a net loss of about 4,000 in free credit, thus making me look MUCH more ‘tapped out’ and affecting my credit score).

    Needless to say, I wasn’t happy about the ‘it can’t hurt to ask’ advice I’d read all over, and I was even more pissed about the company’s policy (BoA, in case you were wondering).

    Just something to keep in mind.

  • JvP says:

    #25 – always do the math, and double-check the numbers
    I only see 24 tips 😀
    Very valuable advice! Lots of stuff to consider.

  • Jim says:

    Owing $120000 on my house 4 years ago, I walked into my bank and asked my banker what the payment on a new Mercedes car that cost $120000 would be for 5 years at 5% interest. He said $2450. At the time my house payment was $1200 for 15 years. So I told him, forget the Mercedes, and give me the 5 years $120000 note on my house. I got a part time job that pays $250 per week, I quit smoking, I canceled all my credit cards and my house will be fully paid off in 13 more months. I even had a chart printed out with 4 columns with payment amount $2564 in col 1, interest amount in col 2, principle reduction in col 3 and outstanding balance in col 4. WHAT A VISUAL DIFFERENCE this chart made. I got it posted right on the fridge and yellow highlight each line as each payment is made. I probably saved over $80000 in interest vs the 15 year note. No matter what happens, when its paid off, they can’t take my house away!!!

  • JimmyO says:

    Paying off all debts including your mortgage is the smartest thing you can do. If you can’t pay cash for something,YOU DON’T NEED IT!! Debt is dumb. The credit card companies laugh all the way to the bank everyday. Dave Ramsey has made a fortune selling books and seminars to people who have someone to tell them not to spend money they don’t have. I wish I had thought of doing it myself.

  • UH2L says:

    I don’t understand all this emphasis on becoming debt free. Sure, it feels good, but often companies use bonds as debt because it makes financial sense. The same thing can apply to individuals. I did extensive analysis on paying down my debt for my mortgage and it just doesn’t make sense 7 years into my 20 year loan given the tax benefits. (If the IRS takes away the interest and property tax deductions then I will reanalyze.)

    One also doesn’t want to pay off student loan debt too early if there are tax benefits and the interest rates are low.

    Remember that getting rid of debt often makes you more vulnerable because you have less cash available for emergenices or a job loss. You may be debt free but then you’ll have to borrow money at a much higher rate to get by.


    • Jimmyo says:

      I guess you are using some sort of new math in your calculations. If you pay off your debts, you no longer pay interest. Even with the tax write- offs it’s still not worth it because you never get to write it all off! Live within your means!

    • AJ says:


      I did the same analysis. I have a mortgage and car loan. Even though the car loan has lower interest rate, the tax deduction of the mortgage interest more than makes more sense for me to pay off the car first.

      JimmyO’s scenario makes perfect sense if there are no other debts to consider. In my case, after paying the car loan, I will snowball the mortgage.

      Bankrate has great calculators to start the analysis and go out at least a few years past the payoff date of the near term debts to get a true picture.

  • Peter Ang says:

    This article is great if you are in debt, but what about someone who is financially free? How does she sustain it?

    Appreciate if some ideas are given here also.

    • southboca says:

      The game plan is pretty much the same but with two extra steps.
      1. Hold down expenses.
      2. Increase income.
      New stuff:
      3. Create a rainy day fund.
      4. Invest remaining money. Seek diversity to protect your money.

  • Blarg says:

    In reference to tip #18 – BAD idea to take out a home equity loan to pay off credit cards!!! Credit card debt is “unsecured” debt, meaning that the credit card company doesn’t have anything to take away from you (collateral) if you default on the loan. When you take out a home equity loan, you are borrowing against the value of your home. This type of debt is “secured” – your home is the collateral. Guess what can happen if you default on that loan? That’s right – you could lose your home! Don’t do it!

    The other tips listed were good ideas, but nothing new – pay off what you can as soon as you can, make more money if you can, and reduce what you spend.

  • Greg says:

    I just began reading your blogs, and you have some good info on here. I never considered calling my credit card company and asking for a lower rate. Asked for removal of annual fee, but never mentioned rate. I’m putting that on my to do list, and I’m looking forward to reading your 171 page EBook.


  • donna says:

    I agree with the payment plan, MAKE A BIGGER PAYMENT IF YOU CAN.Every dime adds up to getting out of debt sooner, so instead of treating yourself to a latte, put that money in the bank towards a debt you owe,pay it down faster and then ENJOY A LATTE with a guilt free and debt free state of mind. yay.

  • Seco Pawlo says:

    Thanks alot for these useful tips,but my problem is that i do not have a job at this right moment,but i have access to the net.Would you give me some tips in how to use the internet to make money if that is real? I seen a lot of websites that talking about how to make money on the net. For example you make $500 in three hours. Is that real ? Tell me please the truth. I am confused,with my best wishes to you again.
    Seco Pawlo

    • tommyt56 says:


      That’s easy to make $500 an hour- just sell something you own that’s worth over $500.
      On eBay, I sell stuff that goes between $50 to $1000. If it takes me 1/2 hour to create a nice ad for something that will sell for $500 then spend another 1/2 hour boxing it up and shipping it I made $500/Hr minus costs.

      Sure, you can call me an idiot, but I didn’t sell you or try to sell you an over-hyped sales pitch charging you $30 for a booklet on how to make $500 an hour!
      Very few people make that kind of money, and even when I do, it’s a one-time shot, it is NOT a 40 hour week! Everyone likes to think when they read that kind of stuff .

      Maybe you know someone who has stuff they want to sell and doesn’t know how to price or sell it. You could offer to sell their stuff for 5-25% commission if and when it sells due directly to your effort. That’s best of all, you only have time invested and not $$$$.

      Think outside the box! Too many people are looking for a “job” and not Abundance. There are things for sale right in front of your eyes if you will be open and see them!

      There always were and always will be deals to be made in every corner of the planet. Maybe the next one could have your name on it!

      Cast away your fears and have a real good look around you with an open mind and you’ll find things you’ve never seen before even though they’ve always been there.

      All the Best,


      • TinaLee says:

        Tom – You give great advice, and it goes along with what I said in another comment above. People need to learn to not be as dependent upon banks and corporations for their existence. Learning to become self-reliant empowers you (no one can fire you) and living in a cash-only world means you’ll have a lot more money in the end.

    • southboca says:

      Think about it. If anyone could make $500 with no money investment in three hours, don’t you think everyone would be doing it?

      That said, legitimate sideline work is the way to go. Do any of your neighbors need odd jobs done? Babysitting, gardening, filing, ironing? Ask. If they don’t have cash, barter. An hour or two of babysitting for homecooked dinner, a cap of laundry soap, or whatever else you need. Be creative.

      If you have things you can sell, use craigslist. No fees. Immediate cash. No shipping costs. As long as your neighborhood doesn’t have deed restrictions, you could also set up a monthly garage sale. Sometimes people even give away their yardsale leftovers. (Take it all, try to resell, donate your leftovers to charity or another yardsaler.) Selling for others (either at your garage sale or on craigslist) and collecting a commission is also a great idea.

      Do you live close to paid recycling? Do you have transportation? If so invest in gloves and a few heavy duty plastic garbage bags. One pound (30 aluminum cans) are worth about .70 where we live. Ask all your neighbors if you can have theirs. (Most places you aren’t allowed to take them out of the curbside recycle bins). Beaches, festivals, and sporting events are gold mines. Just don’t leave a mess!

      You won’t get rich … but you’ll stay busy and make at least a couple hundred a week.

      • Recycler to the hilt says:

        I needn’t even go very far out of my yard to find cans; I need only go out to the dumpsters on the apartment complex where I live; people throw out their cans all the time! When I’m downtown, I also find them by the road and in parking lots and other trash cans. I also ask my friends for theirs. I save all my foil too, and ask others for theirs, as well as their foil roasting pans. It’s astounding how many people just throw out aluminum!

  • Marnie says:

    My favorite from this list is hanging with frugal friends. It really makes a HUGE difference.

  • Gail O says:

    Yes, really read the fine print. For #17, some companies especially credit cards, will charge extra if you make multiple payments per month. They call it a processing fee.

    Use a credit union, not a bank for your checking, credit cards, and loans. Less hassle, less bureaucracy, and they are local. You can actually talk face to face with someone if you have a problem.

    • sticky says:

      You’re right. Great point, I’m surprised it wasn’t in the article. After REGIONS BANK started screwing me over w $14/mo fees, I moved my acct to a credit union. Wish I had done it sooner.
      Didn’t know about the penalty for multi paymts..thanks

    • glj says:

      Absolutely. We dumped BofA because of fees and went to a CU. All of a sudden I do not have unexplained fees.

  • Jacquelime says:

    to late for me i had to go bankrupt

    • Debra Hogan says:


      It’s never too late. You might have had to file bankruptcy but you are now free to start with your new start. Just keep your chin up and be ‘debt-free from now on.’

    • TinaLee says:

      I have personal experience with bankruptcy, as I filed for Chapter 13 relief after my husband passed away. My problem was not excessive debt — I had taken out a second mortgage with what turned out to be a predatory lender, plus I owed the IRS and the interest on that debt had begun to exceed what I actually owed them. By filing for Chapter 13 relief, I was able to prevent the predatory lender from foreclosing on my house (they began the foreclosure process after I was 30 days late with one payment) and I was able to stop the interest from running on the IRS debt (bankruptcy is the only way to do this). I eventually paid off all my debt, but that was because my local credit union was willing to refinance my 2 mortgages (thereby eliminating the predatory lender from my life) and payoff my bankruptcy balance (ending the bankruptcy without owing anyone anything). I do all my banking with my local credit union and never plan to return to the banking system. I felt privileged to live in a country that protects its citizens this way while at the same time teaching me discipline with my money. Banks have become very predatory and it is unconscionable how much interest they charge the public. One of the things the Bankruptcy Court looks at is how much of your outstanding debt is paying the actual cost of goods and how much is interest on top of interest. People don’t realize how much they’re paying for the luxury of having what they want NOW. A little delayed gratification never hurt anyone. Start using vendors who allow you to lay-away merchandise (they hold the merchandise for you while you pay off the balance gradually; no interest is added, only a small, one-time fee). I see short sale houses for as little as $5,000 – $30,000. A lot of people could buy one of these houses with cash, thereby eliminating the banks from the process and therefore never having to worry about anyone foreclosing on the house (unless you don’t pay your property taxes). You shouldn’t have any difficulty paying your property taxes since your won’t have a mortgage payment!

  • ABD says:

    Good tips.

    I always thought I was doing great because I pay off my credit card in full every month. Then I graduated and realized how long it will take to pay off student loans (and I only had them for one year for a graduate degree.)

    I like making budgets, but am terrible at keeping track of them. Mint.com is awesome for me, because I can play around with my budget all I want on there, and it automatically tracks everything I spend money on for me, and lets me know when I’m getting close to going over.

  • sir jorge says:

    get a second job? it’s been 9 months and 343 applications later, and I still don’t have my first job…thanks to the library i can get online

    • jeff says:

      I was out of work for about 3 months and the whole time I was averaging about 100 applications a week. I spent roughly 8 hours a day searching for jobs online and using every website I could think of and then searching for others and if the issue is that you are expecting to make a certain amount or get a job in a certain field then you might want to rethink your career choices because some money is always better than no money. The job I ended up finding only payed $9 an hour but that led to a job making $14 an hour plus commission. Sometimes you just have to take a crappy job to get to the good stuff.

    • glj says:

      One thing I remember reading when I was unemployed in 2005 — “your full-time job is finding a job.” Another piece of advice I received was take a job as a administrative assistant and get your foot in the door.

      • MR JOSH says:

        I have had 2 jobs for the last 3 years, I’m a firm believer in that most people with lower income jobs should always have 2. I have a BA in business Management that literally got me nowhere in the job market, so I got a job working as a cashier at a gas station for 9 bucks an hour, 3 years later I was the Station manager making 13.50 but no benefits. I also asked a family friend if they needed help in their restaurant working in the kitchen, so I did that on top of the job (working 2 shifts a week to start), I quit the gas station because I realized that benefits are important to me. Took a job at a Sams club and took a large pay cut, down to 11.18/hr. Hated that job, and soon found a job opening as a Teller at my local CU, got hired onboard there because of the cash handling skills I aquired at the gas station. Started at 10 bucks an hour full time with great benefits. 6 months after that I got a promotion to Loan Processor. While I’m still not making as much as I was at the gas station, I’m much happier working a job I know I can turn into a career and having great health benefits. Sometimes taking a step down in pay will open up more doors then you could even think of!

    • DiDi says:

      I know its hard to get a job especially in the field you studied. I don’t looking on line for a job(but I do) because the person that is reading your resume’ doesn’t really have a clue what they are really looking for because they never worked in that field( they’re just a headhunter). Also, you might want to try looking at temp agencies if you haven’t tried them already.

  • Eric says:

    The debt snowball is wonderful. It really can work miracles for getting people out of debt. The problem isn’t so much the process, it is staying motivated.

  • Nick says:

    I have a budget for years and a side job. But there’s some other way to make more money. You can play with the idea of having your own business, may a home business. This can be part of ‘take ownership’, part of the game, not just an outsider.

    Paying up debt is just like trying to get richer. There’re 3 options for you.
    (1) Reduce the expenses,
    (2) Increase the incomes, and
    (3) Reduce the expenses and increase the incomes at the same time.

    I just love the third one.

  • John Smith says:

    The post is really very enjoyable as well as informative. Here you have given 25 tips to reduce debt. Few tips seem to be very effective to me. You told about the part time job. I know, this is a good way to get out of debt, but this is not very easy for those person who are already engaged in a profession. According to me, setting a budget for your family is the best way to pay your debts fast. I will also help you to prevent debt in future.

  • Morgan says:

    Great list. My family and I are very aggressively attacking our debt and we are doing many of the things you’ve suggested.
    Re: #1–the prize, I spend time every day (even if it’s just a few moments) imagining in real terms what it will be like to be debt free. How I will open the mail with no sense of dread. How I will pack our suitcases for a trip knowing its all paid for. How i will see significant numbers in my checking and investment accounts. How I will walk into my dream home the very first time–what it will feel like, smell like, look like…I try to make it real.
    I frequently blog on using our dreams to motivate us in the difficult tasks of changing our financial behaviors.
    Thanks for this great post, this is my first time to your site and I will visit again.

  • Imee says:

    Oh my that’s a lot of tips. Thanks for that, I think this can help out a friend of mine who’s deep in debt. I always keep telling her to freeze (actually, literally CUT) her credit cards because that’s what got her in that situation in the first place.

    • Lee says:

      It’s okay not to be boring. You can like her as a friend regardless of your different financial situations.

  • Ashley says:

    An Excellent tips. I like #20, Credit cards is not really good. We are in the middle of crisis now, I think it’s time to watch our needs, be particular on prices and be reasonable on things that you needs.

  • Evelyn Guzman says:

    Those are all excellent tips that I am sure will help the debtors immensely. This is the first time I have heard about getting a debt reduction buddy and I think it is a brilliant idea. This will motivate each other on their journey together to the land of the debt free.

  • Horlic says:

    Great advice. It is important to differential the “NEED” and “WANT” items. Don’t simply purchase the items just because you WANT it and you don’t need it. Be a smart consumer and don’t waste any single penny.

    • AJ says:


      So true. In addition, the public really needs to understand how debt is computed. I saw a Facebook entry that complained about a loan paying out over double in its life due to interest. People do not understand that the outstanding balance is charged interest every month. Maybe if they understood this, they wouldn’t be in such a hurry to borrow.

  • MoneyEnergy says:

    I really like #17 – I have a tendency to plan for the once a month payment, but you’re right, that the interest is calculated based on daily amounts, so the sooner you get it in the better. But I would also add #26, that you need a plan for STAYING out of debt, because otherwise it’s so easy to get back into the debt mess. It may take a while to really be completely free of debt – our incomes and expenses need to catch up with our lifestyles, and we need to manage this balance – but we need to start that process first or at the same time as paying off debt.

  • Craig says:

    Motivation is always key, and think it should extend to more than just reducing debt. Even though it’s a huge goal, it’s still getting rid of something negative, you should also set a positive reward up for yourself so you can budget as well.

  • Meaghan says:

    Good advice. In particular, I like the idea of finding a side job…you need to maximize your income in every way. I also agree that setting a budget is key. (I would say that is number 1) Cut spending and spend wisely.

    • Tammi says:

      Moonlighting (aka A Second Job), is great but doesn’t it kick you in the backside during Tax Time.

      I do a Budget religiously. It really helps me to know where the Money is going and when the Bills are paid. Since I know that the Bulk of My Bills are almost always due near the end of the Month, they are Debited out, which helps a lot.

      I use a Transaction Register Book that you can get at Staples/Bureau En Gros depending on what Country you live in. After I record my Transactions. I then take my Bill, Use My Date Stamp, then put in the Amount that I paid so it is one less thing for me to worry about.

      I also cut downon a lot of things as well if I see a article I like, I try to find it online.

  • Baker @ ManVsDebt says:

    Awesome list.

    My favorite is “Take Ownership”. To me this is the most crucial step and comes before all else. Definitely bookmarking this list for later reference.

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