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I think you will agree with me when I say when you are in debt, all you wanted to do is erase debt.

Debt can cause a lot of troubles. First, it costs a lot of money because of their unbelievable interest rates. It can also prevent you from enjoying your income because you will use your income to make payment for the debt.

Also, debt causes stress, which can compromise your health and even your marriage. It also affects your credit score and can eventually keep you from owning a home.

Debt, indeed, is an awful thing. Therefore, you should do everything you can to erase debt and stay away from it.

So in this post, you will learn the 11 things you can do to erase debt.

#1 Stop Adding to Your debt

The first and most important thing you can do to erase debt is to stop borrowing money.  If you are so determined to succeed in this goal, then you have to stop adding to it. You can start by using cash instead of your card when making purchases.

Using the cash envelope system will help you avoid using your card when transacting a purchase.

#2 Start Creating A Budget

Another way to erase debt is to start tracking where your money is coming from, and where is it going by creating a budget. By knowing how much money is actually coming in will make you more careful about how much you are spending.

Most often than not, we get into debt because we are spending more than we make. By having a budget, you will have more control over your money.

You will start your monthly budget by listing down all of your total household income. The total will include earnings from your full-time job and other side hustles.

After that, you will list down all the expenses that you incur every month. You will need to figure out your expenses in the last 30 days. In order to do this, you will have to print out bank statements, credit card statements, and PayPal statements if you use one.

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You can learn more about how to set up a budget by checking out Best Guide to A Monthly Budget for Beginners.

#3 Set A Budget for Monthly Debt Payment

Once you have a monthly budget, you can now calculate how much money can go to your monthly debt payment.

You can determine your monthly debt payment by first listing down all your debts and their corresponding minimum payments. After that, you will add all the minimum payments. The result will be the amount that you have to at least come up with every month.

#4 Choose the Best Strategy to Pay Off Your Debt

There are a lot of strategies to pay off debt out there, but I would recommend using the Debt Snowball method.

The Debt Snowball method is used when you have multiple debts and this method involves paying off the debts from the lowest balance to the highest balance, regardless of interest.

The concept behind this method is to continuously motivate you to stay on track on your debt payoff journey by giving you quick wins along the way.

To use this method, you start by listing down all your debts and their minimum payments. Then rank them from the lowest balance to the highest balance.

You will then begin paying as much as you can on the debt with the lowest balance while paying the minimums on the other debts.

Once the first debt is paid off, move to the second and so on. Learn more on how to use the debt snowball method by checking out Dave Ramsey’s Debt Snowball Simplified.

#5 Consider Balance Transfers

You will only use this method if you have a really great offer like 0% APR,  3% or less transfer fee and no annual fee. Because balance transfers are not free, you have to make sure the fee you will pay is worth it.

The key here is to make sure that the total fee you will pay doing the balance transfer is less than what you will pay on interest if you are not doing a balance transfer.

If you want to learn more about how to use a balance transfer, check out Best Strategies to Pay Off 10K Credit Card Debt.

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#6 Negotiate Credit Card Interest Rate

If you do not have a good balance transfer offer, consider picking up the phone and calling the credit card company to negotiate for a lower interest rate.

If you have been a good customer, leverage on that, start off by telling them about your loyalty, on time payment and how you like using their card. It never hurt to ask, and besides, if you do not ask, then you will never know if you can lower your interest rate.

#7 Consolidate All Your Debts

Consolidating all your debts in order to have only one monthly payment can lower your debt. You will be able to secure a lower interest rate, therefore, saving you money.

Debt consolidation is done by borrowing an amount, which is equal to your total debt, from a bank with a lower interest rate. You will then use that money to pay off all your debts.

When all debts are paid, start making as many payments as you can on your new loan. Remember, you are still in debt, therefore pay it off as soon as you can. Also, consider a debt consolidation offer that does not penalize you if you pay off the debt earlier.

#8 Work on Reducing Your Expenses

Ideally, after making your monthly budget, you will have extra money, which you can use for debt payment. However, what if you end up with zero or negative?

You will then go back to your expenses and check which areas you can cut back. Most common areas to cut back on are restaurants, subscriptions, cable, phone bills, and internet.

You can use Trim to lower your bills on cable, phone or internet. Or better yet cancel your cable and just get Hulu.

Food is a basic need but it does not mean, you can splurge every time. You can start cutting back on your dining out, start meal planning or lower your grocery bills. Learn how to lower your monthly grocery bill by checking out 19 Incredible Ways to Lower Your Grocery Bill.

Cut back as much as you can on your expenses to come up with a decent amount to cover the total monthly minimum payment of all your debts.

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Take a closer look at your expenses and eliminate all the “wants.” The more “wants” you eliminate, the more money will go into your debt payment. Think of it as a temporary sacrifice. It will be worth it in the end.

#9 Work on Increasing Your Income

If for some reason, you did everything you could to reduce your expenses and still you do not have enough to meet your monthly debt payment budget, consider increasing your income.

You can do this by working overtime, selling your stuff or doing some side hustles. Check out these side hustles that you can start now.

To expedite your debt payoff, earn as much as you can beyond the debt payment budget and put all those extra earnings into the debt payment.

#10 Use “bonus” Money Towards Debt

Throughout the year, there will be surprises, you will earn some bonus money, refunds, dividends, etc and it can be tempting to use the money to reward yourself.

However, remember that you are still in debt and there is no reason to celebrate yet. You can delay your celebration once you paid off all your debts.

Use all the surprise money for your debt payment. The more you put into your debt payment, the sooner you can celebrate.

#11 Don’t Be Afraid of Debt Counseling

If for some reason, you did everything you can but still you cannot get yourself out of debt, consider debt counseling.

Debt counselors will listen to your needs, understanding your situation and will provide you unbiased information that will help you.

It does take courage to seek debt counseling, but you should keep in mind that they are there to help you, and they had helped a lot of people like you. You are not definitely alone.

There you have it!

These strategies to erase debt can seem easy to do, but the hardest part is to stick with it. However, if you keep your eye on the ultimate goal, there is no reason you would not get there.

How about you? What are your strategies to erase debt?

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