There are two basic ways to get more money to pay off your debts. The first is to decrease your expenses. The second is to increase your income. Below are some ideas to do both. As you read through each item, you’ll probably think “This will only save me $5 or $10 a month.” If you can cut back on 10 different things and save even $100 a month, that’s an extra $1,200 per year that you can put toward your debt. Not all of these will apply to you and that’s ok. Adopt as many as you can, even if it means making a small sacrifice. The more of these you can adopt, the more money you’ll have to accomplish your goal.
Decrease Your Expenses
Using expense tracking software or journaling your daily spending can help you identify places that you spend the most money. Look for ways to cut back in these areas.
Spend Less on Food
Cook at home instead of eating out Cook from scratch rather than eating pre-made dinners Swap meat (it’s often the most expensive part of the meal) for a less expensive form of protein like beans or eggs, even if it’s just for one day or one meal per week. Take your lunch to work Grocery shop with a list and stick to it Don’t shop while you’re hungry, you’re prone to overbuy Use coupons, but only for items you’d buy anyway Start a container garden Buy store brands Use leftovers to make new meals, or just eat leftovers Freeze excess foods, like Thanksgiving leftovers or extra spaghetti sauce, to eat another day Let your kids pack their lunch, even if it’s just a few times each week When you dine out, get water instead of soda Avoid buying non-grocery items at the grocery store where they tend to cost more Read circulars or check online to see when things are on sale Ditch Starbucks and make your own coffee. Or drink the coffee at work. Use reusable grocery bags and shop at stores that give you a discount for doing so. Pack food for road trips rather than stopping at fast-food restaurants Avoid impulse buys at the cash register
Cut Your Transportation Costs
Buy the right gas for your car (87/89/93) Get your car serviced regularly to optimize gas mileage Run all your errands in a single trip Avoid unnecessary driving Carpool Trade your SUV for a cheaper, more gas-friendly car Telecommute, if your employer will allow it Do price comparison on major repairs, especially with dealership quotes Make sure you have the lowest possible insurance rate—get new quotes periodically Increasing your insurance deductible will often decrease your rate Don’t get any new tickets or have any accidents and your insurance rate might go down Walk or ride a bike when you can. You’ll get exercise and save money on gas
Reduce What You Spend on Clothes
Forget about designer labelsGet trend-proof clothesWear layers in the winter instead of buying new sweatersDon’t forget sales racks, thrift, and consignmentLaunder your clothes appropriately to get longer wearAvoid dry clean only labels (to save on dry cleaning)Learn to sew—you can update old clothes, alter ill-fitting clothes, and repair holes to make your clothes last longerRefashion old clothesBuy clothes at the end of the season when they’re on saleBuy versatile clothing that can function in several different outfits
Be Entertained for Less
Rent movies for $1 a night from RedboxCheck out DVDs from the libraryCatch a matinee when movie prices are a few dollars cheaperCheck for a dollar cinema in your area—they may play the films that are no longer in the theater but haven’t been released on DVDUse the library instead of buying new booksStream music online for free instead of purchasing an album or one song at a timeHave game night with family and friends
Lower Your Housing Costs
Move to an apartment with lower rent Refinance your mortgage for a lower interest rate Get a roommate (or two) Do your own home repairs Do your own lawn maintenance and landscaping Make your own kitchen cleaner
Cut Your Cable/Satellite/Internet Costs
Cancel premium channel subscriptionsCut cable and pay only for streaming servicesNix pay-per-view and movies on demandAsk for a promotional rateUse Hulu or visit the network’s website/download the network’s app to find recent episodes of your favorite showsBuy your modem instead of renting from the service providerMinimize the number of devices with their own internet plan—for example you may not need the internet for your smartphone and your tablet
Lower Your Phone Bill(s)
Use your cell phone as your primary phone and get rid of the landline Bundle your phone (if you keep it) with your cable and internet Ask for a promotional rate Get the right rate plan for your cell phone Turn off unnecessary features, even if you have to talk or text less Stick with the pre-installed ringtones instead of downloading new ones Only download free apps and beware apps that have in-app purchases
Re-Evaluate Luxury Services
Wash your own carMow your own lawnPaint your own nails vs. paying for a manicureCut out visits to the spaGet your hair trimmed less oftenTake a staycation instead of a vacationDitch the gym membership and use fitness DVDs and at-home workout routines
Banking and Finances
Don’t pay late fees—make sure to pay all your bills on time Avoid bank overdrafts or insufficient funds fees—always check your account balance if you’re unsure whether you have enough money to cover a transaction Ask your bank how you have any monthly fees waived and switch accounts/banks if necessary Use your bank’s ATM to avoid paying additional fees or make a small purchase inside a store and choose the cash-back option Make a budget and stick to it Use expense tracking to figure out where you’re spending the most money Cancel subscriptions and other recurring charges
Increase Your Income
Ultimately, you can only cut your spending back so far. You still have to pay your basic living expenses. Finding ways to increase your income can allow you to generate additional income that you can use to put toward your debt.
Pay the right amount of taxes, tweak your tax withholding if necessary Optimize your benefits, by making sure you’re getting the best benefits from your job Ask for a pay raise Work some overtime hours Get a second job Make money from a hobby Sell your arts and crafts on Etsy Check to see if you have unclaimed money, but watch out for scams Start a tutoring business Play an instrument? Give weekly lessons Drive for a ridesharing service like Uber or Lyft Make money blogging Offer services as a virtual assistant Create and sell an online course or digital product
Get Rid of Unwanted or Unnecessary Household Items
Have a garage saleSell old books to a storeSell old CDs using a website like SecondSpin.comSell old clothes to consignmentPawn electronics
What Do You Do If The Extra Money Isn’t Enough
If you can’t pay off your debt even after taking some of these steps, you should consider seeking assistance from a nonprofit credit counselor or a debt relief program. Pursuing debt settlement is a last resort because it involves stopping payments and working with a firm that holds that money in escrow while negotiating with your creditors to reach a settlement, which can take up to four years. Withholding payments from your creditors can seriously damage your credit score.
