20 Simple Ways to Reduce Debt

Nobody just wakes up and finds themselves in debt. It usually happens because of poor decisions or because of a financial hardship, like the loss of a job. No matter what the cause might be, it's important to make changes so that you can gain back your financial independence once again.

While lifestyle changes might not be the most enjoyable, they are what it takes to get out of debt and start enjoying life without worry. Here are 20 different ways that you can reduce your debt fast.

How to Reduce Debt Fast

1. Write it down

The first and most important step for anyone looking to reduce debt is to write down your debt number. It could be on a piece of paper on your refrigerator or a sticky note on your computer screen. Write down the total amount that you are in debt and use this constant reminder as motivation. As your debt starts to go down, keep updating the piece of paper so you can see what kind of progress you have made.

2. Put away your credit cards

Credit cards can you be useful because you can earn rewards and cash back for money you are already spending. However, if you are in debt, then it might be best to put the cards in a safe place and use only cash. This will allow you to keep on top of your spending and make sure that you are lowering your debt and not increasing it.

3. Don't just make the minimum payment

Make sure that you are paying more than the minimum payment on your credit card each month. This will reduce the amount of money you need to pay in finance charges.

4. Start a budget

Sitting down and figuring out a budget isn't exactly the most fun activity, but it is a must. When you understand exactly where your money goes each month, you will be able to save more and put it towards your debt repayment.

5. Make smaller payments

Check the fine print on your loan or credit card because some will charge interest on a daily basis. If this is your case, then smaller, more frequent payments can help to cut down on the finance charges that you pay over the life of your debt.

6. Take advantage of debt consolidation

When you have several types of debt, it might get a little complicated to keep track of it all. If that is the case, then exploring debt consolidation might be a good option. You can move all your debt into one bundle so that you are just paying one payment each month.

7. Refinance your home

Mortgage rates are still at extremely low levels, which means that there is an opportunity to save money on your house payment. This savings can be applied straight to your debt repayment. A mortgage refinance should only be done if you are going to lower your rate by at least one percent. You should also consider how long you plan to stay in the home.

8. Get a lower credit card interest rate

Call your credit card issuer and see if they would be willing to lower the interest rate on your credit card. This will work best if you show a history of making payments on time and you have a fairly high credit score.

9. Move your credit card balance

If you are not able to negotiate a lower rate with your credit card issuer, then you can always take advantage of a 0% interest balance transfer offer. This will help save you hundreds of dollars in interest. Just make sure that you create a plan to eliminate the debt before the end of the 0% introductory period expires.

10. Ask for a lower rate on a home equity loan

If you have a home equity loan, take a look at what your interest rate is compared to the current market rate. If you are paying quite a bit more than the market, call up your lender and see if they would be willing to lower your rate.

11. Make extra money

There is no better way to reduce debt than by making more money. This could be from a second job or just a side hustle that you do in your spare time. The extra money that you earn can go directly to your debt.

12. Sell unwanted stuff

Let's be realistic, we all have things in our homes that we no longer use. Why hold onto them if they can be sold to make money? Instead, use places like Ebay or Amazon to get rid of this stuff and use the proceeds to pay down your debt.

13. Cable must go

Cutting the cord on cable has been the trend over the past few years. Prices have only increased and the ability to stream your favorite shows online has made cable something that most people could do without.

14. Investigate rates for auto, home and life insurance

For most of us, it's been quite a while since we took a look at the rate we are paying for our home, auto insurance and life insurance policies. Take an hour and shop around. You might be surprised that you can save a little money on each policy.

15. Host a garage sale

Spring is officially here, which means it's garage sale season. Go through your home and find all the things that you no longer use. Give them a price and see if anyone wants to buy them. This is a great way to make extra money in just a few hours over the weekend.

16. Save money on gas with grocery store rewards

Most of the major grocery store chains have a rewards program that allows you to save money on gas. If your store does this, take advantage. When you spend $100 in groceries, for example, you may be able to save 10 cents or more off each gallon of gas. Over a 12-month period, this can add up to a nice amount of money. Each time you fill up your car, place the savings aside and use it towards your debt.

17. Skip the morning Starbucks

Before you leave for work in the morning, make yourself a cup of coffee for the drive. A person that purchases five cups of black coffee from Starbucks each week will save approximately $520 throughout the year (based on $2.00 black coffee).

18. Program your thermostat

By programming your thermostat, you can set the temperature to be lowered when you are not at home or at night when you are sleeping. This can help significantly reduce your monthly utility bills.

19. Pack your lunch

Instead of eating out for lunch, pack something from home each day. It could be a sandwich or leftovers from last night's dinner. This will save you $5 to $7 per day at a minimum.

20. Cancel luxury subscriptions

If you are paying a fee each month for something that is a luxury, then consider canceling it. Having the newspaper delivered to your house might be nice, but you can easily read it at the library or even online. The same goes for your magazine subscriptions.

By using a combination of these tips, you should be well on your way to getting out of debt fast.

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