How to Free up Money to Put Towards Debt Repayment

This article was contributed by The Zebra.

Money is tighter than ever before in the midst of the pandemic, and personal debt remains a major issue for many Americans. All the money management sites encourage you to find ways to pay down debt, but it can be easier said than done when you’re just trying to make ends meet. With that in mind, here are a few ways you can free up money to start paying down your debt.

Do a Deep Dive into Your Finances

First things first: you should take a long, hard look at your money and see where it’s going. In other words, you need to make a budget. This may seem like a no-brainer, but if you don’t have a budget, you’re not alone: only about 40% of Americans use a budget even though almost everyone agrees they need one.

Even if you’ve never budgeted before, don’t waste any time feeling bad about it — and don’t be afraid to take an unflinching look at your finances. There are plenty of free software tools out there to help.

Move to a Cheaper Area

This option definitely won’t be for everyone. If you’re broke and struggling just to keep the lights on, you’re probably in no condition to pack up your things and find a new place to live elsewhere. But if you’re stable enough to be in a position where you can put more focus on paying down debt, then moving to a cheaper area could be a major help.

Moving could mean cheaper housing costs, less money spent on groceries and utilities, maybe even transportation, depending on where you move. You’ll have to do some research and run the numbers, of course, but the end result could save you big in the long run.

Cut the Grocery Bills

Groceries are something none of us can do without — but it is possible to make a major dent in your food expenses without subsisting entirely on rice and beans.

The first thing most people will tell you is to stop eating out and ordering in quite as much, which is a great start. But you can also trim your food budget with online coupons, buying in bulk, signing up for loyalty programs that offer member savings, and more. You can also scour the web for cheap, tasty recipes and learn to make a new dish while you save money.

Take Advantage of Discounts

Finding discounts isn’t just for your grocery trips, either. Take the time to seek out and take advantage of discounts everywhere you can. Use up those unused gift cards. Talk to your internet and utility companies about getting a better rate. Shop around for car insurance discounts and talk to your student loan provider. If you’re eligible for student or senior discounts at the places where you shop, don’t be afraid to ask! Every little bit can get you closer to being debt-free.

Sell Your Stuff

Selling your stuff to make some extra cash is a time-honored tradition, and thanks to the Internet, there are more ways to sell than ever. You don’t have to resort to the swap meet or yard sale — you can list your items everywhere from Amazon to eBay to Etsy to Facebook Marketplace. It may take a little work and you may have to keep a keen eye out for scammers, but some people have made entire careers out of selling their unwanted things online… there’s no reason why you can’t do it, too.

Drive Less

Cars are expensive: fuel, insurance, and maintenance all cost money. If you live in an area where you can walk, bike, or use public transport, you can put some extra money away by doing that instead of driving. You’ll not only save money in the short term, but less wear and tear on your car means it will last longer.

Find Other Ways to Save

A close cousin to hunting for discounts is searching for lower rates elsewhere — for example, talking to your bank to negotiate for lower credit card rates or look into waiving bank fees. If those negotiations don’t work out, maybe you can just switch to a no-fee bank or credit union and make your life easier as well as cheaper.

You can also save money by canceling or downgrading your subscriptions to services and activities. Paying out the nose for a gym subscription? Find somewhere a little cheaper. Shelling out too much for streaming services? Change to an ad-supported version, or just cut out the ones you use the least for a few months or so. There are even apps to help you find subscriptions and cancel the ones you don’t need or want anymore.

You can also call your cell phone provider to ask about cheaper plans, or just bite the bullet and switch to a more affordable provider. Many cell phone companies will offer you major incentives to switch, which means more money in your pocket for paying off debt.

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Melanie

Melanie Lockert is the founder of the blog and author of the book, Dear Debt. Through her blog, she chronicled her journey out of $81,000 in student loan debt. She is also the co-founder of the Lola Retreat, which helps bold women face their fears, own their dreams and figure out a plan to be in control of their finances. She is passionate about empowering women, helping others get out of debt, and focuses on the intersection of debt and mental health. Every September she organizes a Suicide Prevention Awareness Blog Tour, to help share resources for those struggling with debt and suicide. In addition to her love of personal finance, art and music, she is also a karaoke master and a cat mom to Miles and Thelonious.

1 comment

Jon Sterling July 10, 2023 - 1:30 am

As interest rates rise everywhere, it is extra important to beat down your debt as fast as you can. Credit card companies are raising rates on balances as high as 30% right now, which is terrifying. Do what you need to do to make it go away!