10 Things To Start Doing Now To Get Out of Debt by This Time Next Year

As we’re ending a year fraught with all kinds of challenges, including financial ones, it’s time to start planning for a brighter future. By making a plan now to pay off debt and sticking to it, you can significantly reduce the amount you owe by this time next year. Even […]

As we’re ending a year fraught with all kinds of challenges, including financial ones, it’s time to start planning for a brighter future. By making a plan now to pay off debt and sticking to it, you can significantly reduce the amount you owe by this time next year.

Even if you think you can’t possibly find the money to make a dent in your debt, you have options.

Consider this: The average American spends $1,497 monthly — or almost $18,000 per year — on nonessential items, according to a 2019 survey commissioned by Ladder and conducted by OnePoll. Just think of how much debt you could pay off by simply streamlining your expenses.

And that’s just the tip of the iceberg. Prepare to be inspired as you consider these things to start doing now to get out of debt by next year.

Last updated: Nov. 5, 2020

Photo of a young couple going through financial problems.

Trim Unnecessary Spending From Your Budget

Make a list of everything you splurge on, such as eating out, coffee shop drinks and toys and games your kids ask for when it’s not a special occasion. Then, find low-cost — or better yet, free — alternatives to each item on your list.

Instead of eating out, take the time to meal prep so you’ll have meals ready to go for a week or two. Invest in an insulated cup and make your coffee drink at home. Tell your kids that they need to start earning money for nonessential purchases. Additionally, look at all your subscriptions to see if you can unsubscribe from some of them. After all, who really needs multiple streaming services for music and movies?

Businessman in wheelchair with smartphone at the desk in the office, making a phone call.

Negotiate Bills From Service Providers and Creditors

You might be surprised by how much you can save each month just by calling service providers and asking for a discount. Then, you can put the money you save toward your debt.

Look at competitor pricing before calling your cable provider to negotiate. Also, if you have bundled services — one fee for phone, internet and cable — see if you’re really saving. Compare what it would cost to pay for each service separately from a competitor.

If you want help negotiating, consider downloading an app that will do it for you for a cut of your savings, such as Truebill or BillShark.

You can also try to negotiate a better interest rate on your credit cards. Call the customer service number and ask for a lower rate. Mention how long you’ve been a customer and how you’ve always paid on time to give weight to your request.

Internet shopper entering credit card information using digital tablet.

Consider a Balance Transfer

If your creditors aren’t willing to give you a lower interest rate, consider a balance transfer. You can find many 0% annual percentage rate offers ranging from 12 to 18 months, which will allow you to pay off your debt more quickly.

The best balance transfer offers are approved for people with excellent credit. So if your credit score is shaky, you likely won’t qualify for those top offers.

Additionally, unless you are able to pay off the balance within the promotional period, a balance transfer may not help you save money.

Read More: How To Transfer a Credit Card Balance

Worried girl looking at laptop screen at home.

Decide On a Debt Repayment Strategy

If you have credit card debt, you’re not alone. A 2019 survey from CNBC Make It and Morning Consult found that 55% of Americans are burdened with debt related to plastic.

If you really want to make progress on your credit card debt, you need a debt repayment strategy. Here are two popular options to consider.

  • Avalanche method: Make only the minimum monthly payments on all credit cards except the one with the highest interest. At the same time, put as much money as you can toward the highest-rate card until it’s paid off. Then, repeat with the next-highest interest card. Through this method, you more quickly reduce the amount of interest you’re paying.
  • Snowball method: Put the most money you can toward the card with the smallest balance, while making minimum payments on the rest of your accounts. Once the smallest debt is paid off, move on to the next smallest debt. This method allows you to feel successful due to the speed with which you can wipe out these smaller debts.

Young woman sitting in her Downtown Los Angeles apartment, finishing work in the evening while having another cup of coffee.

Pick Up an Online Side Job

You could rake in hundreds of extra dollars per month — or more — with a side job. To make it easier, pick a side job that you can do online at home after you return from your 9-to-5.

Here are some ideas to earn money to put a dent in your debt:

  • English tutor: Platforms like Magic Ears and VIP Kid offer virtual positions teaching English to students in China. Plus, you may be able to teach before your day job, due to the time difference between the U.S. and China.
  • Freelancing gigs: Upwork and Fiverr are two platforms where you can find all kinds of freelancing gigs, such as writing, web design, virtual assisting, translation and logo design.
  • Write and edit resumes: If you have a human resources or hiring background, you can strike out on your own to get clients who need resumes written. However, if you lack experience but have writing chops, you can apply with a company like Randstad RiseSmart.


Happy Japanese couple at home, having video conference call with the parents.

Tighten Up Your Holiday Budget

Although many people are struggling financially right now, 47% of Americans are planning to use a credit card to finance their holiday purchases, according to a Lending Tree survey from October. Unfortunately, depending on your budget this year, you could be saddled with holiday credit debt for months or years to come.

To avoid adding to your debt, tighten up your holiday budget. Here are a few ways to do it.

  • Assign a dollar amount to each gift you will give or a spending limit per person if you like giving multiple gifts.
  • Cut yourself from the gift list.
  • Use cash or a debit card to pay for purchases if possible.
  • Invest time in finding amazing deals and savings, or look on sites like Etsy for unique gifts that can make a great impression but don’t cost a lot.
  • If you have a specific talent — cooking, gardening, painting, sewing, woodworking, metal art, dog training — make coupons for family and friends to redeem as a gift.


Everyone do shopping online.

Sell Things You Don’t Need — Including Collectibles

If you’re willing to comb through your belongings, find things of value you’re willing to part with and list them on online marketplaces, you could stand to make a tidy profit. And those extra dollars can help you pay off current debt.

Consider sites like eBay, Facebook Marketplace, OfferUp and Mercari for listing all kinds of name-brand household goods, children’s clothing, electronics and more. If you have a closet full of designer clothes, shoes and handbags, consider listing those items on Poshmark.

See: Geeky Collectibles That Could Make You Millions

Young woman with braided hair sitting by the table, looking on her smart phone.

Make Extra Payments To Reduce Debt Faster

Another way to wipe out debt faster is to pay multiple payments each month toward credit cards. If you get paid twice per month, coordinate a payment with each paycheck.

And if you want to make a dent in your mortgage, see if your lender will let you split your monthly mortgage payment in half and make biweekly payments. This strategy can help you pay one extra payment per year, which can cut up to three years off your note.

Create a Debt Payoff Poster

Creating a debt poster will allow you to visually track your progress in paying off your debt, which can motivate you. The idea is to use something to represent your debt, such as a thermometer or leaves on a money tree. Each time you pay off a portion of your debt, you color in a corresponding portion on your poster until your debt is all gone.


woman in shop choosing leather bags and backpacks, fashion accessories and shopping concept.

Avoid Impulse Spending

If you spend a lot of time on social media, your feed is likely filled with all sorts of ads that catch your eye. Instead of clicking on those ads, don’t. All clicking will do is serve to tempt you to buy something you probably don’t need.

Make a vow not to use your credit card for discretionary expenses, like shoes you want but don’t need or the latest subscription box. It’s easy to use plastic to fulfill your whims because it can give you a mindset of, “I’ll worry about paying that off later.”

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This article originally appeared on GOBankingRates.com: 10 Things To Start Doing Now To Get Out of Debt by This Time Next Year

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