Five Ways to Start Eliminating Your Debt

ways to start eliminating your debt

Debt comes in many forms. It may be a loan you took out to buy your first car, the winter jacket you bought using a credit card, or a bet you lost to a friend. Regardless of the type, they all have one thing in common – you owe somebody money.

It’s not fun being in debt and it can be tough to get out of it. It’s always easier to dig yourself into a debt hole than it is to climb back out. But, just like anything else, debt can be overcome. You can throw off those chains of debt and acquire the financial freedom you desire.

All it takes is a determination, persistence and commitment.

Here are five ways you can start saving and begin to pay back what you owe.

Your journey to debt freedom begins now.

Minimum Payments Cause Maximum Pain

If you want to stay in debt, just make the minimum payments. With much of what you send away each month going to cover the interest, minimum payments are your enemy.  Paying more than the minimum each month will dramatically shorten the time you are in debt.  If you are serious about getting rid of your debt, you need to attack it in a straightforward manner.

Pay as much as you can until the debt is gone. If you have multiple debts, start with the one with the highest interest rate and move on down the line.

Change Your Lifestyle

If you’ve spent yourself into debt, you need to change the way you live. Sure, dining out at fancy restaurants three times a week is nice, but not if you can’t afford it. When you are in debt, you need to change the things that caused the problem.

Related: Dining Out on a Tight Budget: Five Tips to Save Money

Make The Tough Choices

One way to get rid of a chunk of your debt may be sitting in your driveway. Selling your car can bring in some cash that can be used to pay off some of your debt. If living without a car is impossible, why not sell it and purchase a cheaper model. Or, if you’re family has two cars, just sell one of them. Start car-pooling with friends or get a transit pass.

Tough times call for tough decisions to be made and getting rid of your car may be one of them.

A Commitment To Save

Saving money needs to become both a habit and a hobby. Those that enjoy saving, and take pride in it, are well on their way to paying off their debts. Keep track of good deals you’ve found and tell your friends and family about them. Brag about your newfound frugality.

Clip coupons and go straight to the bargain bins and sale racks. Every dollar you save is a dollar that can go towards your debt.

Don’t Suffer In Silence

Dealing with a problem like debt on your own can be extremely stressful and ineffective. It may be a good idea to reach out and speak with a credit counsellor. They are trained professionals who deal with debt problems each and every day. They can show you the way to the stable financial future you long for.

Debt rarely occurs all of a sudden. It’s a long process that may start small but eventually grows to an overwhelming problem. Escaping from debt is much the same. If you could get out of debt whenever you wanted, you’d probably not be in debt in the first place.

Making small changes to your lifestyle, committing to saving, and reaching out for help are all part of the overall debt solution. It may not be easy – but it’s definitely worth it. When you emerge victorious from your battle with debt, you will feel like you’ve been reborn. You will be able to start living again without the constant specter of your financial situation hovering over you.

You can do it.

jeffrey schwartz

Jeffrey Schwartz

Jeffrey Schwartz is the executive director of Consolidated Credit Counseling Services of Canada and president of the Credit Association of Greater Toronto. Consolidated Credit is a national non-profit credit counseling organization that teaches consumers about personal finance.

Please visit www.consolidatedcredit.ca for more information on credit counseling, debt management and budgeting. And follow Jeffrey on Twitter too.


Comments

    • Michelle

      Michelle 06/25/2014 9:02 a.m. #

      If you have debt, then there is a big chance that you need a lifestyle change - I agree. You need to evaluate your expenses and see where you can improve.

      • Sicorra

        Sicorra 06/25/2014 2:47 p.m. #

        Yes, and people need to take their finances seriously. I see so many people just laugh when they find out they owe heaps of money. Maybe it is a nervous laugh, and deep inside they are serious, but how they deal with things will show if they are truly serious or not.

    • Ankit

      Ankit 06/25/2014 2:19 p.m. #

      What a co-incident. I wrote a post today about debt consolidation and one of the key takeways i highlighted was that any debt consolidation or management program is only a short-term fix. A change in lifestyle and discipline is critical to manage debt which is exactly what you mention here

      • Sicorra

        Sicorra 06/25/2014 3:03 p.m. #

        Yes, I was just on your blog and noticed that too. I do believe that consolidation loans are a solution for people, but only if done right and managed properly, ie changing the way they spend.

    • Lisa E. @ Lisa vs. the Loans

      Lisa E. @ Lisa vs. the Loans 06/25/2014 2:45 p.m. #

      "Minimum payments cause maximum pain" - YES! If there's one thing I tell my friends, it's to overpay on your debt, even if it's just by $5. Every little bit helps!

      • Sicorra

        Sicorra 06/25/2014 3:04 p.m. #

        So true Lisa, every little bit helps. And it may not feel like it but every few extra dollars you put towards your debt you are in turn saving money on interest fees.

    • Ronnie

      Ronnie 06/25/2014 3:06 p.m. #

      I'm familiar with Jeff's writing and he's always on the spot when it comes to financial tips. I followed many of these tips to the letter when I wanted to get out of debt. I even moved in to my parent's home to not have to worry about rent. It's been 100% worth the commitment!

      • Sicorra

        Sicorra 06/26/2014 8:46 a.m. #

        Thanks Ronnie! Moving back home is an interesting topic all on its own :-) For some it can work out really well, while for others it can simply add more stress to their already stressful situation.

    • Michelle

      Michelle 07/06/2014 1:37 p.m. #

      I think when I was just getting started on this journey, the hardest step for me was making those difficult choices. Once I got over the initial reaction to not being able to do what all of my friends/family were doing, it got a lot easier.

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