30 ways to dig yourself out of debt

Many people fall into debt, ranging from mortgage debt to credit card debt. In fact, according to a recent GOBankingRates survey, the average overall debt of Americans — including those with no debt — is approximately $63,000. However, among survey respondents with debt, the average total amount owed is $140,113, the survey showed.

It's not difficult to find yourself in debt — even if you stick faithfully to your budget and don't use credit cards for anything frivolous. Unforeseen life circumstances such as losing a job or unpaid time off due to illness can force you to use a credit card to pay for utilities and other necessities. And then there are the unexpected expenses: car repairs, healthcare costs or a new water heater.

If you're in debt — especially if you're getting calls from creditors — take action.

Click through to see how you can get yourself out of debt:

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How to dig yourself out of debt
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How to dig yourself out of debt

Put Down the Shovel

The first step to getting out of debt is to stop digging yourself further into debt. Stop using debt to fund your lifestyle. Don't be afraid to cut up cards. If you don't have them, you won't use them. If you need to keep one for emergencies, place it in a container of water in your freezer. Waiting for it to thaw will give you time to examine whether there is another way to solve the problem.

Don't Miss: The Best Ways to Pay Off Every Kind of Debt 

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Stop the Madness

Eliminate the temptation to open new accounts by opting out of preapproved credit offers using the OptOutPrescreen website. Also, unsubscribe from department store emails alerting you to sales that might lure you to "save" money by spending on your store credit card. You'll find the info on how to do so in tiny print at the bottom of the email. 

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Set Up Savings

It might seem counterintuitive not to put every penny toward paying off debt. But creating a savings account of just $500 or $1,000 can prevent a credit relapse down the road when you suddenly need a new set of tires or face an unexpected medical bill. 

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Get It Together

Now is the time to use your preparation to actually make a plan. First, gather statements from each of the sources of your debt, including credit cards, auto loans, mortgages and student loans. Make a master list of how much you owe and the total amount of money you're paying on debt each month. Put them in order from the smallest payoff balance to the largest.

Add up minimum payments, then increase the amount by $100 or whatever you can truly afford. This is the total amount you'll need to budget each month to get out of debt.

Get Started: 15 Easy-to-Use Budgeting Templates 

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Give Yourself a Visual

Keep your list where you can refer to it often. That way, you can see the progress you're making as you pay down debt. Or, post a whiteboard in your kitchen or home office and record your current debts. The act of entering lower numbers each time you pay down a debt — and watching the list dwindle as you pay things off — will give you a boost and serve as a deterrent to spending more. 

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Don’t Pay for Free Financing

Did you sign up for cards offering free financing for a limited amount of time? Pay them off in time so you'll avoid getting hit with large interest payments. Also, know that new purchases can be hit with regular interest charges right away, according to the Consumer Financial Protection Bureau. 

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Start With the Smallest Balance

It makes financial sense to pay off the cards with the highest interest rates first. This will save you the most money in interest payments.

However, you might get a bigger emotional boost by eliminating the debt on cards with the smallest payoff amount. You can pay off several cards with small debt loads faster than you can pay off one card with a bigger debt load and a higher rate of interest. You're more likely to stick with your debt-reduction plan if you see your list of debts getting shorter. 

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Keep Tackling One Debt at a Time

Focus all your extra money on paying off one debt at a time and making minimum payments on the others. If you have an extra $100 in your budget, use it toward paying down the smallest balance.

Once that smallest balance is paid off, take the money you would have paid each month to the newly expired debt and apply the cash to the bill with the next smallest payoff. You'll be amazed how fast the debt disappears. 

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Streamline Your Budget

Write a list of each monthly expense and total it. Draw a line through any monthly expenses you can eliminate. Start with things you pay for each month, but seldom use. These might include gym memberships or online news subscriptions. And look for overlapping expenses, such as paying for cable, Netflix, Amazon Prime and premium channels.

Find Out: Dumb Expenses You Need to Slash From Your Budget Now 

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Pay on Time

Paying a day — or with some cards, even a few hours — late can trigger the dreaded late fee. While online apps such as Mint Bills can send you reminders, they're not infallible. Keep a whiteboard calendar where you can easily see it, and use the board solely for recording bill due dates. Keep track of due dates and amounts owed for each day, and you'll never be late again. 

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Don’t Let Windfalls Blow Away

Use your tax refund, gift money from Grandma or holiday bonus to pay down a chunk of debt. Although it might be tempting to use the cash on a big splurge, paying off debt will give you a psychological boost without any buyer's remorse. 

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Trim the Fat

Make coffee at home instead of buying a cup on the way to work. Stock a week's worth of meats, cheeses, vegetables and bread in your work refrigerator for making sandwiches and salads on the job instead of eating out. If your food is already at work, you won't end up eating out if you forget to bring lunch. Free up extra money by eliminating unnecessary incidentals

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Do It Yourself

Do things yourself instead of paying to have them done. Wash your car, groom the dog or mow the lawn. Pay yourself what you'd normally shell out by applying it toward debt.

Find Out: 36 Expensive Services You Should DIY 

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Make a Trade

Look for a local bartering group on social media, and offer your own skills in exchange for services you can't perform yourself. Make sure you're trading with licensed contractors for things like automotive or home repairs, or you will have little recourse if the work goes wrong. Use the money you saved to make a payment on debt. 

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Analyze a Downsize

If your lease is almost up, consider moving to a smaller apartment or to an area where rents aren't as high. Or, sell your current home and pay cash for a smaller one. Sell your car to eliminate payments and get out of debt fast. Drive a more modest vehicle you can buy with cash. 

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Earn More at Your Job

Volunteer to work overtime or holidays at your job if you have the opportunity. If you're paid on commission, put in more hours to make extra sales to create a higher income stream.

Are you due for a salary increase? Make a list of your work accomplishments that show your value as an employee.

Get over the jitters and just ask if you really want to get that raise

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Get a Second Job

Look for part-time work you can do on a day off to help you get out of debt fast. Answer phones at a local real estate company on Saturday mornings, work a few evening hours at a retail store or be a part-time merchandiser for a manufacturing company. 

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Get a Gig

If taking on a second part-time job isn't a realistic option due to kids or other obligations, consider a part-time gig you can do at home. Do freelance work such as consulting, pet-sitting or working as a virtual assistant, and put every cent you earn toward paying your debt. Drive for Uber or Lyft and make money moving people around in your free time or while the kids are at school. 

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Sell It or Rent It

Have a yard sale or sell items online that you don't use or need. Turn those had-to-have shoes you'll never wear again into cash. Or, sell outdoor gear, exercise equipment and other items you don't use. If you live in a business or tourist district, consider renting your driveway or parking space during hours when you're not using it.

See: 20 Hidden Sources of Income Lying Around Your House 

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Eliminate Consumer Debt First

Credit cards typically come with a higher interest rate than student loans, auto loans or mortgages. Eliminating all your credit card debt first will save you a bundle in interest while you're getting debt-free.

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Make Biweekly Payments

Many major banks allow you to pay half your minimum payment every two weeks. The advantage? Since you're charged interest on your daily balance, reducing the balance biweekly will lower the amount of interest you pay over time. At year's end, you'll have made 26 payments — the same as 13 months — making it a good strategy for reducing debts on the cards where you're just paying the minimum. 

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Consolidate With Caution

You can free up money in your monthly budget by using a debt consolidation loan to roll credit card payments into one monthly payment at a lower interest rate. However, this move can end up costing you more in the long run. A longer loan term means you'll pay interest on the balance for a longer amount of time, adding up to extra money spent on interest over the life of the loan.

Do the math before you sign any papers to see how much interest you'll pay according to the schedule. Get a loan with no prepayment penalty, and make extra principal payments to reduce the total interest you'll pay over the life of the loan. And remember to put those credit cards away and not start the cycle again. 

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Lower Your Interest Rates

You can sometimes lower your interest rate by making a balance transfer to a credit card with another bank. Some cards offer zero percent interest for up to 18 months. The downside can be a fee of 3 percent to 5 percent to transfer the card.

Still, this can be a good option for some. Work diligently to pay off as much of the balance as possible during the interest-free term. Make sure the interest you'll pay at the end of the promotional period isn't higher than what you're paying now. Cut up or close the cards you're transferring so you don't get in trouble with them. 

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Ask for an Interest Reduction

If you have a record of making payments on time — and your credit is in decent shape — ask your credit card company for an interest-rate reduction. Start with the card you've had the longest; customer loyalty counts. If you're turned down due to your credit score, try again once you pay down some of your debt and your credit score improves. 

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Close Cards Carefully

You might want to close cards as fast as you pay them off, but doing so can actually hurt your credit rating. Lenders consider your credit utilization ratio — the total amount of credit available to you versus your total debt — when deciding on your rate. So, closing unused accounts can make it harder to negotiate lower interest rates on your other cards.

Credit reporting agency Experian urges you to keep cards open until your total debt is less than 30 percent of your available credit. Then, keep your oldest accounts open and close others one at a time to stay within the 30 percent credit utilization ratio. And Experian reminds you that the "30 percent" mark is just the upper limit — the lower your credit utilization ratio, the better. 

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Negotiate Medical Debt

If your overall debt picture includes medical bills, don't be afraid to ask for a discount. Go to the hospital billing office in person and offer to settle the bill for what you can afford. Even if the hospital won't meet your terms, it might offer you a significant discount. If you can't pay the bill all at once, ask for an interest-free payment plan. 

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Lower Student Loan Payments

If your student loan payment takes up a large chunk of your monthly budget, check on the U.S. Department of Education's Federal Student Aid website to see whether an income-based repayment plan can lower your monthly payment.

Although paying less per month extends the term of your loan, your student loan interest is likely less than what you're paying on consumer credit cards. After eliminating your credit card debt, you'll have freed up a significant amount of money each month to apply to your student loan and chop it down quickly. 

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Knock Out Your Car Loan Early

While you're whittling away at credit card debt, you can still shorten the amount of your car loan without increasing your budget. For example, simply making half-payments every two weeks will pay off your car in 54 months instead of 60. Pay those last six months of payments toward your credit card debt to knock it out faster. 

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Take Years Off Your Mortgage

As your largest debt, your mortgage likely will be the last one you wipe out. Just like paying off your auto loan early, you can make half-payments biweekly to shorten the amount of time it will take to pay off your home loan by four years. In the process, you'll also save thousands of dollars in interest. Make sure your mortgage company applies your payment to the principal when it receives the money rather than holding it until the next due date. 

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Get a Home Equity Line of Credit

Trading your unsecured credit card debt for a larger amount of debt secured by your home should only be a last resort. If you decide to solve your debt problem with a HELOC, only get a loan that covers the amount needed to pay debts. And close the cards you're paying off so you're not tempted to start running them up when you're low on cash.

Keep Reading: How to Get a Home Equity Loan When You Have Bad Credit 

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This article originally appeared on GOBankingRates.com: 30 Ways to Dig Yourself Out of Debt

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