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13 Simple Ways to Get Out of Debt in 2022

With the right knowledge, habits, and resources at your disposal, you can learn how to get out of debt in 2022.

Debt – a dreaded word that, sadly, many of us are going to have to face at some point in our lives.  If you’ve already been to college or university, you’ll likely have already built up a fair amount from student loans, for example.

Student loan debt, however, gets paid off with your wages.  What we’re talking about today is the type of debt that’s too much which can mount up if you’re not careful.  It’s super tempting to take on credit cards, auto loans and more besides – but ultimately, unless you can fund the repayment schedules lined up for you, you’re going to find yourself in a world of cashflow problems.

Debt doesn’t have to be the end of everything – 99% of the time, it actually isn’t.  Here are thirteen great ways for you to start getting out of debt and freeing yourself up from financial demands, starting today.

How to Get Out of Debt Faster

While millennials, as a whole, are typically saddled with more debt than the generations before them, there is nothing inevitable about a life controlled by debt. With the right knowledge, habits, and resources at your disposal, you can become totally debt-free within a short period of time.

Here’s how.

1. Get a Grasp on the Numbers

The first step to eradicating your debt is to fully understand how much you owe and how you can feasibly pay it all back. You can use a number of calculators and online debt services to find out the full amount that you owe and how much you should be putting away each month to service your debt.

This first step is undoubtedly the scariest, as most people would rather keep their heads in the sand when it comes to their financial troubles. However, knowing the truth is the first step toward liberation. 

2. Work Out Your Budget

The next step is to recalibrate your life in a way that frees up more cash for debt repayments. Prioritize your most urgent, high-interest debts and then figure out where you can trim your expenditures to service them.

Use a budget planning tool like the one offered by Mint and Personal Capital to reduce your utility bills wherever possible, before looking at any lifestyle changes you can afford to make. Simple steps like not eating lunch out will save you thousands every single year, so leave no stone unturned when looking for savings.

3. Create a Debt Management Plan (DMP)

Once you get an overall view of your financial standing, it’s time to come up with a concrete debt management plan. You can easily come up with one by using the tips in this post.

Debt management plans help people pay off debt and learn how to eliminate it for years to come.

Unlike many other debt relief programs, a debt management plan can increase your credit score which is have a very long positive effect on your future financial goals.

Make a Budget

If you’re faced with hefty debts and are struggling to make ends meet – re-evaluate your budget. It’s entirely possible to learn how to budget on a low income and learning how to get out of debt is possible.

Redo your monthly or weekly budgeting and keep receipts. Look at areas where you could stand to cut down on costs.  

Make changes to the purchases you make, if only temporarily. Unfortunately, getting out of debt often means making concessions – and the biggest concessions you may have to make right away will concern your existing spending habits.

Free apps like Mint and Personal Capital can really help out beginners if they don’t want to mess with creating their own budgeting template.

Avalanche vs. Snowball

When you are focusing on paying down debt, you’ll want to narrow down the debt amount with the highest interest rate. Once that account is paid off, move on to the next highest rate and so on.

This is the avalanche method because you are building momentum by accelerating your payments and getting more spending power to pay off the next debt.

If your debt accounts have similar interest rates, then consider using the snowball approach instead. This is where you will pay off the account with the smallest balance and once that’s paid off tackle the next smallest balance.

Once you start seeing these small wins, you’ll focus on paying them off faster and help you reach your goal of becoming debt free.

4. Save Wisely

This one might seem obvious, but most people never save the right way. First of all, simply squirreling away what you can into a separate bank account isn’t going to make your debts go anywhere.

Wise saving means making your money work for you, so explore low-risk investment options even if you have little money to spare. This will help boost your available capital without requiring any work from you. You can start investing even if you have little money to spare.

5. Maximize Your Income

Those on a fixed income may feel especially trapped by their debt, but this needn’t be the case. Explore avenues for maximizing your income as a way to service your debt.

This could be as simple as letting out a spare room, taking part in the gig economy, or doing some part-time freelancing work on top of your full-time job. There are countless ways to boost your income, so make sure to do some research and see which ones work for you.

If you’re in need of a quick cash boost to make debt payments, check out the following posts:

6. Negotiate Lower Interest Rates on Your Debt

You can also consolidate your various debts into one manageable system. One of the most popular ways to do this is to refinance your home.

Whether you want to lower your monthly mortgage payments, pay off your mortgage faster or get cash from your home, LendingTree’s marketplace will help you land the best deal for your refinance. You can also choose this method to reduce your existing mortgage payments by switching lenders and getting a lower rate and saving thousands.

Rather than visiting a financial advisor, homeowners can now get quotes from the top mortgage lenders below to determine how best to go about this popular method of debt reduction.

7. Rinse and Repeat

Once you have your budget in control and your debt is slowly being paid off, don’t stop there! Keep pushing to and continue finding ways to pay off your debt fast.

Look for other ways to save like using money-saving apps and be sure to monitor your progress as you go. It’s always smart to make adjustments as you progress and start building your emergency fund.

8. Create an Emergency Fund

Too often as a society do we fall into the trap of being ill-prepared for unanticipated financial burdens. Out of necessity and desperation, we turn to credit cards and personal loans to cover the costs that we didn’t see coming. While credit cards and personal loans have their purposes, we have become overly dependent on them, and this dependence coupled with high-interest rates keeps us bound to the mounting debt around us.

This is the main reason having an emergency fund is so important – to enable us to cover unforeseen expenses without accruing additional debt and without breaking the bank.

The get started, start building your emergency fund which should be three to six months’ worth of expenses. If that amount isn’t possible right now, aim for one months’ worth, which is still a good place to start.

9. Get Your Credit Score in Check

Debt can have a massive effect upon your credit score, which – if you didn’t know already – is your passport to borrowing further money in future.  Mortgages, credit cards, you name it – your credit score shows companies how reliable you are at being able to pay the money back.

If you’re in debt and are worried about your credit score – and your ability to take on finance in the future – it’s high time you undertook a solid, thorough credit report and discussed your options for healing that score.

10. Consolidation

One of the most effective ways to get out of debt with several creditors at once is – as many debt experts will tell you – to consolidate what you owe into one lump sum with a separate lender.

This can effectively lower interest rates, can ensure that debtors stop pursuing you, and may also help to heal your credit rating – though this isn’t guaranteed. Your best option, before you consider consolidation in any form, is to consult a debt advisor to discuss your options. Never be afraid to reach out for help.

11. Start Selling

Yes – believe it or not – one of the most effective ways to start breaking down debt – which carries very little risk – is to start looking at your existing assets and possessions, and to start thinking about cashing them in.  

This may sound horrifying – but in the case of mounting debt, it may be an option you have to take. Consider selling apps, consignment shops or services such as eBay – where you can easily generate cash for your old, unused items – or even look at your bigger assets to sell on if the debt is mounting even faster.

You can even learn how to make $1,000 fast in our recent post.

12. Stop All Credit Cards

Yes – some people can really make credit cards work for them – but you should only ever consider using them if you are going to be physically able to stand up to their monthly demands. There are many personal finance gurus who teach that you should cut up all your credit cards, close your credit card accounts, and live entirely on a cash-only basis.

Spreading and delaying costs is an attractive proposal – and it works for plenty of people – but if you don’t keep up to monthly payments, you’re going to be digging yourself an even bigger hole.

Do yourself a favor, especially if your credit score is taking a hit – get those cards paid off with a sensible plan as a priority – and cancel them.

13. Consider Freelancing

Another way around keeping up with debt is earning extra cash – it’s not always so easy if you’re working every hour you’re sent, but it’s now easier than ever before to get set up on a freelancing site to make extra money.

Can you design corporate logos? Proofread? Write content? Provide voiceover work? If you have a talent, you can market it online – and it’s often a breeze making up some handy extra cash in just a handful of hours. This may well be your ticket to debt easing sooner rather than later.

The Bottom Line

The millennial generation is on track to become one of the most heavily indebted in history. As of late 2020, Millennials ages 25-34 have $27,251 in debt, and most of it isn’t from student loans, according to CNBC. The reasons for this are numerous, including skyrocketing tuition fees, expensive housing, and a growing addiction to credit card debt among younger generations.

These strategies are great ways for you to start getting out of debt and freeing yourself up from financial demands, starting today. how to get out of debt with no money

Escaping debt is never an easy process, but it’s something that’s possible for everyone, regardless of their financial situation. Take these steps today to ensure you’re living debt-free as soon as possible.

I hope you learned how to get out of debt with no money in this article, as we shared our top tips.

What are some strategies you have used to get out of debt quickly? Have you ever tried debt-crushing ideas on this list?

Brian Meiggs
Founder of Smarts, Brian is an entrepreneur and investor who enjoys working out, reading, spending time with his family and friends, playing chess, traveling and creating great content. He’s passionate about helping others make smarter money moves and achieve financial freedom. He uses the free Personal Capital app to manage his cash flow and net worth.


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