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Tips for Getting Out of Debt

If you’re in debt, you’re not alone. The Federal Reserve estimates that in credit cards alone, American owe nearly one trillion dollars. That doesn’t include car payments, medical bills, student loans, home loans, and other common forms of debt.

If you’re in a great deal of debt, it can feel like you’ll never be able escape the pit of money you owe. But there’s good news: you have options and you can get out of debt. Here are a few tips for you:

Get Serious About Paying Off Your Loans

No matter what size of debt we’re talking, it may be time to go into “debt focus mode.” What does this mean? It means that you are carefully budgeting your money, saying no to eating out, doing your own hair, doing DIY gifts for Christmas, carpooling to work if you can, etc. Whatever it takes! Write down your monthly expenditures on paper and figure out what you can cut. Sell items you don’t need and put that money towards your debt.

Research Loan Forgiveness

Depending on the type of loan or debt, there may be a program in place to help forgive some of it, or at least some of the interest that has accrued. For student loans, often if you’re willing to work in inner city schools or for programs like Teach For America for a period of time, the program will pay off your school loans.

Get a Reduced Interest Rate

Large companies purchase and sell debt all of the time. Do your research on your specific debt before trying this, but there are times when it is possible to make a deal with a company to pay them at a reduced interest rate. Also look into refinancing options for a home loan or consolidated loans for student loans.

Know Your Rights

If you’re being called by creditors constantly, you need to know your rights. They are not legally allowed to make threats, call during certain hours of the day, and do other things that they often do to try to get you to pay. Research your rights and record any phone calls. (Make sure you notify them that the call is being recorded as soon as you pick up.)

Don’t Try Any Get Rich Quick Schemes

Whether you’re thinking about the Powerball or doing multi-level marketing, don’t plan on a “get rich quick” scheme to pay off your money. Statistically speaking, doing these things drives people further into debt and does not help.

Join a Debt Reduction Community

Whether it’s friends from church or a Facebook group that focuses on budgeting and reducing debt, surround yourself with people on the same journey! You’ll be surprised at how many people are just like you and are beginning to feel free from their debts!

Invest Time into a Financial Education

While there are many different options to try, many churches do programs like Financial Peace University to help educate men and women of faith on financial matters. See if any churches in your area are offering courses and make going a priority. There is no greater investment than one that will help you life debt free.