15 Ways Successful People Get Out of Debt Fast Even on a Low Income

2. Use the Debt Snowball Method

Just like the previous method, the snowball method also involves paying up a little more than the minimum balance per month. Only, this time around, there’s a little twist to it. You’ve probably heard of the snowball effect, or even more likely, you’ve heard this overused TV cliché at some point.

A ball of snow starts off as something small and likely insignificant and picks up more snow as it rolls along, increasing its mass and surface area. As it gains momentum, it gets so large to the point it’s potentially dangerous, or in this case, beneficial. How it works is this: first, you first to list all the debts you owe. Next, arrange them in ascending order from the smallest to the largest.

Over the course of the year, use this list as a guide on how you’re going to pay off your debts. Throw any funds you can spare on the smallest debts while making the minimum payoff on the rest of the loans. Once the smallest loan on the list is fully paid off, start climbing up the list and put the newly excess funds on the next loan on the list. Rinse and repeat until you only have one glaring balance left.

The main advantage of this approach is that it will free some of your funds quicker. And, if you’re wise enough, you can budget for accordingly. Some or possibly all of the funds should go to repayment of the next loan on the list. You may like it to generally any kind of erosion including glacial erosions like on a snowy hillside. The process starts off slowly, but will eventually gain enough momentum to destroy a small village or in this case, your debt.

3. Get an Extra Job – Online Marketplaces

Unpleasant as it may sound, there’s no simpler way to get rid of a loan faster than making a bit of extra income. Besides, the two aren’t mutually exclusive, and if you handle it right, it can amplify your efforts even further. One of the things you must able to do is keep your money management skills in check. Nearly everyone has a skill they can put to good use, from babysitting to running a car wash.

If physical labor isn’t your cup of tea, you’re lucky to be living in the information age. There is a multitude of sites on the internet you can visit to earn a little extra income. Some of them include PeoplePerHour.com, Freelancer.com and TaskRabbit.com, to name a few. In a nutshell, you could get an extra job to do exclusively at home or on-site in rare cases. In fact, if you’re motivated enough, you could even pick up a skill to earn you some more cash.

There’s always a market for freelance programmers, marketers, copywriters and even photographers. You may even find yourself with a new hobby that you’ll enjoy. There are, of course, a few gotchas when it comes to getting a new job. First, don’t push yourself too far.

As much as getting rid of debt is important, don’t sacrifice your mental and psychological health to do it. You’re a human being, not a robot. Second, stick to a budget. If you decide to pour all the extra cash you’re getting into the repayment process, be consistent. It will pay off in the long run.

4. Work Within a Budget

This has already been mentioned a couple of times in this article, but it cannot be overstated. Having a budget is extremely crucial if you want to get rid of your debt as fast as possible. You must cut down on your other expenses and live on as frugal a budget as possible. This will be difficult to manage if you have a family to take care of, but it’s only temporary.

Once you’re done paying all your loans, you can go back to enjoying your life. The first part of getting down to a real budget is prioritization. You will have to evaluate spending from previous months and cut down on non-essential costs, like entertainment. For some households, entertainment takes up the bulk of monthly spending. You will have to revisit where you stand and get rid of whatever is unnecessary.

Set some money aside for the usual expenditures like food, clothing, water and electricity. Then, start pouring off the extra money into your loans. Either way, living on as little income as possible is an essential skill to have. It helps you realize which of your expenses are needs and which are simply needless expenditures. At the same time, it also gives you more to spend on stuff when you’re done paying.

If you’re able to master the art, you could use the same approach to save some serious amounts of cash. Some of that could go towards starting your own business, retiring early or even taking a long, well-deserved vacation.

5. Sell Off Stuff You Don’t Need

Inevitably, you need to raise some cash as fast as possible. If getting a job on the side doesn’t cut it for you, then maybe selling some of your old junk could help. Most people have stuff lying around that they likely don’t need. At the same time, there are also probably people out there who will willingly pay a good amount of money for your stuff.

The easiest way to unload yourself of all those items is by having a yard or garage sale. However, before you jump into that, there are some states that have regulations regarding them. So make sure to check with your local authorities before commencing. Alternatively, there are websites that exist solely for this purpose like Olx and Craigslist. If you’re in the mood, you could even turn the whole scheme into a money-generating endeavor by reinvesting the proceeds from the sale.

A sizable chunk of the profits from your new business could go towards the repayment of your outstanding balances. Some of the most valued commodities include books, computer games and non-essential electronics. Clothes are another common commodity for the re-use market. However, they are more difficult to sell for several reasons.

You have to find someone your size and who’s willing to buy at the price you’re offering. Home appliances you no longer need are one of those things that will always have a market. A few minutes of research should help you determine their value. After which, the Amazon Marketplace or eBay would be a great place to start.

6. Get a Part-Time Job

Working a whole other job alongside your regular job can be tiring. Factoring in overtime, time with family and time to be alone, and the whole thing seems borderline impossible. The great part is, you don’t have to fuss over getting too much done in too short an amount of time. During the holidays, getting a seasonal job is a little easier. Keep in mind that working retail can be a bit of a hassle.

But if you’re willing and able to work a part-time job to earn some extra cash, it will go a long way in clearing out those debts. Even outside holidays, there are lots of seasonal jobs you can easily get. Spring brings farm and garden jobs with it. Summer calls for the need for tour operators and lifeguards. Autumn is the season of harvests and casual work at haunted houses and the like.

Even aside from following the seasons alone, there is always an employer somewhere looking for someone to work temporarily. Getting a part-time job is especially helpful for people whose debt doesn’t run into the hundreds of thousands. Former students, for instance, have an average student loan debt of $35,000. Minimum wage may not seem like a lot towards repaying everything, but it beats letting that interest pile up.

If you do this alongside your regular job or if invest the money into another money-making venture, you’ll do better. Working in some places also puts you in a better position for employment if you ever decide you want a permanent position instead.

7. Renegotiate Your Bills

It may seem like corporations are these monolithic systems that only exist to suck up your money, but they care about customer retention. As unbelievable as it may sound, some of them are open to discussion about their rates. Sadly enough, most of them are set in stone, like mortgages, taxes and car payments.

Some of the bills you may negotiate include internet services. But this only applies to areas that are not locked out where only one provider is available. If you’re are able to choose your internet provider, list what the competitors offer and at what price. Then call your provider and discuss the discrepancies you’ve noticed and ask for a decrease in the rate.

The same applies to cable TV providers, especially considering the competition they face from internet companies like Netflix and Hulu. Similarly, medical bills, credit card interest rates, car insurance rates and rent are all negotiable, in most cases. The thing to remember is that the less you pay for fixed expenses a month, the more money you can wire towards paying off the loans.

When it comes to negotiating payments, the worst that can happen is for them to say no. In a best-case scenario, the best that can happen is massive savings on the money you spend each month. It never hurts to ask. Besides, you’re at the liberty of walking away if your service provider’s rates cut too deep into your pockets. The sacrifice will be worth it in the end.

8. Consider a Balance Transfer

In the unlikely scenario that your credit card company declines to reduce your interest rates, the next best thing is a balance transfer. A balance transfer is a mechanism to help you move your debt to a different credit card with lower rates – preferably 0%. Albeit this privilege might cost you a three-percent transfer fee.

A balance transfer is usually set up in your provider’s portal online or by calling one of the customer service numbers usually at the back of the card. Keep in mind that your issuer might approve the transfer of the full amount or only part of the requested balance. This all depends on your credit card limit or other rules your issuer may have, like the dollar limit for each transfer.

You normally cannot transfer any kind of debt between products offered by the same issuer, though. For instance, you can’t transfer a balance from one Chase card to another or an American Express card to another. Before the move is approved, you will have to continue making payments to your old account until you’re given a go-ahead by your new card issuer. The whole process could take about three weeks or more.

Once the transfer process has been formalized, get a fresh start. Pay off the debt as quickly as you can, especially during the interest-free period they usually offer. Don’t just jump from one debt to another. You are probably going to have to make other sacrifices in the process, which means a couple of lifestyle changes. Most times, this method will work best in conjunction with one of our other tips for getting out of debt.

9. Use Your Found Money Wisely

If you’re deep in debt, there are a few things you have to give up if you want to save up. To be honest, everyone makes poor choices when it comes to money. At times, you may be sabotaging yourself and you don’t even realize it. It’s only human. But breaking some of these bad financial habits is a great place to start.

One of the most obvious financially draining habits is smoking. That, together with drinking are some of the deepest money draining wells you could ever fall into. The only real way to get rid of all the extra burden is quit smoking and drink in moderation. According to a report by The Washington Post, the average number of cigarettes per person per day in 2015 was 16.4.

Rounding up the number to 17 and using the mean price of $6.28 per pack daily in the U.S., you can save an approximate $1,604.54 every year. And that’s just one cost. There are lots of other habits most people don’t realize cost them a pretty penny. These include throwing away leftover food, impulse buying and eating out too regularly. If you were to factor in all these extra costs, you’ll save over $4,000 a year.

Being human, dropping habits is much easier said than done. However, like anything worthwhile, it will take a lot of mental fortitude to achieve your goal. But once you’re able to break the habit, redirect that money towards paying off your loans. Alternatively, formulate a whole new budget to help you redistribute the extra funds.

10. Drop Expensive Habits

Kicking old habits to the curb may not be enough to help you save money. Oftentimes, you’re going to need some new ways to entertain yourself and get rid of stress. An excellent way to fill the void would be to get a new hobby, or better yet, reformulate your budget to take care of getting yourself in better shape. At the same time, you should adopt whole new spending habits to help you save money.

One of the most important habits you must always remember to stick to is your budget. Before you spend your money, make a list of things that you deem essential. Afterward, divide the money into the different categories you’ve created and spend wisely. When it comes to the debt-clearing category, cash in the money as soon as you can. This will help you overcome the temptation of spending it on things you might not need.

Some more general advice regarding your spending habits includes:

• Always monitor your spending.
• Avoid getting extended warranties
• Always pay your bills on time to avoid late fees.
• Only use your credit card if you’re sure you can pay back the charges at the end of the month.

Breaking out of unhealthy habits can be quite challenging. However, the best way to approach it is to take it slow. Once you’re able to kick the habit, develop new, beneficial habits to stop from slipping back into your old ways. You can use the extra money you saved for the betterment of your life. Among these new decisions is to ultimately kick out debt from your life.

11. Form New Beneficial Habits

Kicking old habits to the curb may not be enough to help you save up. Often times, you’re going to need some new ways to entertain yourself and get rid of stress. An excellent way to fill the void would be to get a new hobby, or better yet, reformulate your budget to take care of getting yourself in better shape. At the same time, you should adopt whole new spending habits to help you save money.

One of the most important habits you must always remember to stick to is your budget. Before you go out spending your money, make a list of things that you deem essential. Afterward, divide the money into the different categories you’ve created and spend wisely. When it comes to the debt-clearing category, try and cash in the money as soon as you can. This will help you overcome the temptation of spending it on things you might not need.

Some more general advice regarding your spending habits includes: always monitor your spending, avoid getting extended warranties and always pay your bills on time to avoid late fees. Along the same lines, only use your credit card if you’re absolutely sure you can pay back the charges at the end of the month.

Breaking out of unhealthy habits can be quite challenging. However, the best way to approach it is to take it slow. Once you’re able to kick the habit, you should develop new, beneficial habits in their place to stop yourself slipping back into your old ways. All the extra money saved can then be rechannelled for the betterment of your life. Among these new decisions is to ultimately kick out debt from your life.

12. Get Rid of Temptation

One of the most important parts of saving up to get rid of debt is discipline. Discipline, by definition, is the willingness to follow a strict set of rules. In this case, you need to be financially literate to the point nothing can faze you. For most people, a simple glimpse of the latest offers on Amazon or Walmart has them searching in their pockets for cash.

For others, food is their ultimate temptation and they can’t help but pick up a pizza on their way to work or order takeout for dinner. Sometimes, it helps to reward yourself, but regular spending such as this serves no benefit. And because you’re likely to carry your credit card around with your everywhere, and the risk of even more debt grows exponentially. Everyone has their own temptations.

Regardless of what yours is, it’s always best to live frugally while trying to repay a debt. If you know yourself enough not to be able to resist temptations, don’t put yourself in a position where you will be faced with them. Don’t go randomly browsing Amazon, viewing TV channels with all sorts of advertisements and keep the fridge stocked, so you don’t waste so much on food. When worst comes to worst, stash those credit cards away from your reach until you pay off the debts fully.

Giving into temptation is fun but rolling in debt for the rest of your life definitely isn’t. Financial discipline is a useful skill to have, and it will pay off in terms of your psychological and emotional health.

13. Stop the Bleeding

This simply means you have to lay off the debt. Stop using your credit cards altogether and revert to the old-fashioned cash-only system of life. Along the same principles as the previous point, this will require you to relinquish your possession of credit cards. Hide them away so you’re no longer tempted to use them and stack up even more credit card debt. If you simply must use credit cards, move away from the high-interest providers and stick to the lower-rate ones, instead.

If you prefer to be extreme about it, you can freeze the card in a block of ice or even cut it in two. Withdraw and use any money in your bank account for hard cash. Alternatively, you can also shift to just-as-effective debit cards. However, these come with the risk of overdrawing your account and higher rates if you do. You should take extra precautions if you decide to go for the latter option.

Overall, the need for financial literacy and discipline resonates with this point. Similarly, the need for a budget marks its resounding importance even further. The whole process will be for naught if you work so hard to get rid of owed balances only to accrue more.

Remember, though, credit cards aren’t evil. They are simply a useful tool that’s easy to lose control of sometimes. If you decide to stick with them once you pay off your debts, you will need to be wise about your future spending. In the unfortunate event of a medical disaster, perhaps the next point on the list will be of help.

14. Keep an Emergency Fund

You never know when disaster might strike. The disaster here refers to a medical emergency, loss of employment, debilitating illness or a major expense you can’t spare. A debilitating illness or medical emergency is the most likely scenario. The U.S. is infamous for having a notoriously flawed healthcare system if you experience a life-threatening experience or even a miraculous experience like childbirth.

In the U.S., the average cost of treating cancer is $10,000 a month and it runs well into the hundreds of thousands of dollars. If you’re lucky enough to have a reliable health insurance scheme covering you, the cost could go down to a few thousand. In major cities, the average cost of an ambulance ride is $1,000. And major surgery ranges in the hundreds of thousands, on average.

These numbers are discomforting, especially considering that such emergencies are impossible to predict. The only real way of ensuring an unexpected catastrophe doesn’t dig you into a giant hole of debt is keeping an emergency fund. When drafting your budget, make sure a significant amount of it goes into the caution money section.

If you’re afraid of spending it all, create a savings account with your bank and set it up so that you can only withdraw in case of an emergency. If you never to have to use it at any point, use some of the cash for debt repayment.

15. Get Help If You Need It

There’s a reason people say having excess overdrawn fees is “drowning in debt.” People often feel as though there is no way to pay off mountain-loads of loans or credit card bills. Such people often resort to even more destructive habits like gambling and alcoholism, rather than seeking help. Debt is also one of the leading causes of the rising number of stress-related diseases like obesity, depression and suicide.

If you are awake all night because of stress, consider contacting a debt counselor. There are lots of professional, reputable debt counseling agencies to draw an action plan for consolidating your debt and managing your finances.

A helpful rule of thumb to go by is that your total debt should not exceed 31 percent of your gross income. If anything, most times anything over 28 percent should have you worried. Once you hit this threshold, start considering the factors that led to your current situation. The most crucial thing a debt counselor will help you with is drawing up a budget. They will help you plan for everything you own and help figure out where the bulk of your payment disappears.

From internet services to cell phones, and even groceries, their job is to help you tweak as little as $50 a month or basically $600 a year. Additionally, they also help with people stuck in student loan debts. Instead of deferring, a smart counselor can help you understand how much money you owe and which repayment option to choose.

These are the 15 ways successful people get out of debt fast, even on a low income. Take one tip each week and make it a healthy money habit. Pick up one or two a week, and before you know it, you could be out of debt forever.