Debt. It sounds daunting, yet it’s an inevitable—and often necessary (think education)—part of many people’s lives. There are numerous reasons people can fall into debt, from student loans and mortgages to emergency medical expenditures and home repairs. Although society deems debt as bad or as something to avoid at all costs, it’s often unavoidable. Should you forgo an education just because you can’t afford to pay for it outright? Definitely not (but make sure to optimize your education financial plan), as an education—more often than not—leads to a future career and subsequent income. Not only that, but things happen for which we can’t always plan or predict (this is when an emergency fund comes in handy), such as a necessary medical procedure or the happy surprise of twins instead of a single child (double everything).

Get out of debt fast

We certainly don’t condemn debt, but we are proponents of fiscal responsibility. So on that note, we are going to share some tips to help you get out of the red and back in the black. There isn’t an overnight solution, but utilizing these tips should help you to make a dent in your debt and better manage your finances.

Have a clear motivation

You’re more likely to stay on track while getting out of debt if you have a clear goal in mind—a motivation, if you will. Why is it important to get out of debt? Why do you want to get out of debt (other than just for being-out-of-debt’s sake)? Perhaps you want to get out of debt for your family, or you have plans to make a career move or launch a new business. Getting out of debt will take a lot of sacrifices, and you’ll be able to face them with a more positive outlook if you have your goals—near and far—top of mind.

stay focused

Start paying yourself first

No matter your financial situation, you should always pay yourself. This means you should save or invest a certain percentage of your income (whenever you receive it, be it monthly or weekly) regardless of your liabilities. So before you start making out bills and paying back loans, you should make sure you dedicate somewhere around 10% to yourself. This doesn’t mean you shouldn’t give yourself a portion to spend freely, but you should never stop saving, no matter what you owe. You can always increase the percentage when your income allows, and decrease it if your payments to lenders increase—but this “dedicated to self” portion should always be there (and you should always be adding to it).

Start paying yourself first

Consider consolidating and/or refinancing your debt

First and foremost, let’s quickly go over the difference between debt consolidation and debt refinancing. Consolidating debt is combining multiple loans into a single loan. This simplifies things, as—instead of dealing with separate bills, payments, rates, etc.—you only have to worry about a single loan. Refinancing debt is replacing a loan (or multiple loans) with a new loan, with the goal to find a new (better) loan with a much lower rate. You can consolidate at the same time as refinancing, as you can use the new loan to pay off multiple loans. Examples would be getting a loan with a better rate (perhaps from a bank, credit union, or other lender) or getting a balance transfer credit card (pay off your high-interest cards/loans first).

Refinancing your debt

Cancel subscriptions

We’re all guilty of setting up monthly subscriptions and then being a bit lax in utilizing them. The overpriced gym membership we’ve only used once, the Amazon Prime subscription we set up just for quick shipping on one order—it’s time to trim the fat and cut the excess waste. Sometimes people forget they even have recurring subscriptions in the first place—perhaps that free trial we forgot to cancel before the payments started, or that HBO Now subscription we got just to watch Game of Thrones. This is why it’s important to always look at your statements even if you have automatic payments set up—you may find recurring automatic charges to things you forgot about. Not only that, but consider making some sacrifices—choose just one streaming service instead of three, or find a friend who’s in a sharing mood. Sacrifices now will pay off in the long run when you’re debt free.

Netflix subsribtion

Make overpayments

Perhaps your financial situation has gotten a bit better, or you find yourself with a little extra income—consider making overpayments (paying more than the amount worked out with the lender initially). Paying off the principal of your loan earlier makes a significant impact on the interest you pay throughout the overall term of the loan. When you pay back more than what was originally agreed upon, you’ll only pay interest on the outstanding balance. You can do this by making a one-off overpayment (lump sum) or by paying more each month. Make sure your lender allows this without penalty, and ensure that your overpayments go toward the principal. Making extra payments can also improve your credit score, as it lowers your credit utilization ratio (your total debt compared to the credit available to you). If your balance on a credit card is very close to your credit limit, you are considered higher risk—thus, your credit score goes down.

Make overpayments

Consider a side-hustle

AKA, make more money. Take inventory of all of your skills, and see if you can utilize any of these with freelance gigs or side jobs to supplement your income. Perhaps you’re a designer for a company—consider taking simple freelance gigs (short-term, if you’re short on time and or energy) for companies that don’t have a designer in house. Perhaps you’re a developer—consider helping small businesses set up a simple website. You can also consider numerous side-hustles outside of your area of expertise—sell clothes you no longer wear, rent your home on Airbnb, participate in paid research studies…there are a lot of options. Just make sure you calculate the time and energy that will go into it, to make sure your primary gig doesn’t begin to suffer too much. It may be tough and you may work some long hours, but watching your debt go down faster will keep your motivated—just keep your eyes on the prize.

Consider a side-hustle

Cancel or stop using your credit cards

We can also coin this tip “avoid falling back into bad habits.” If your debt stems from buying things (with credit cards) you can’t pay for, do not start using them again when you see your balance go down. Even if you eventually get yourself out of debt, don’t think that’s a green light to go ahead and start charging. You may think you’ve wised up, but it’s very easy for things to spiral out of control. You don’t necessarily need to cancel the card, and many advisors will tell you to keep a card open with zero balance versus closing the account (it impacts your credit utilization rate and could lower your score). You can just cut up the card and not use it, but keep the account open. If you do want to close it, make sure you pay off the balance of all other cards, which would make your credit utilization rate zero (and don’t time it right before applying for a different loan).

stop using your credit cards

Take all of these tips into consideration, but also—as is always recommended—seek help from people who are there to help you. There are financial advisors aplenty, and more often than not they’ve seen and dealt with everything—don’t be afraid to seek their help and advice. These people do this for a living, and even if you have an idea of how you got into debt and what you should do to get out, sometimes it helps to have an impartial third party guide you and help you stick to a plan. Finances can be tricky, and it’s always better to make sure you fully understand how each decision impacts another.

What strategies have you used (or can recommend) to get out debt? Let us know in the comments.