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27 Ways to Get Out of Debt

When you’re in debt, it can be easy to pretend everything is fine. Until one day . . . it catches up with you. Yep—debt is dumb. Real dumb. And the only way to get rid of it is by facing it head on. As much as you’d rather bury your head in the sand and pretend it’s not there, it only stays “hidden” for so long. So, if you’re wondering how to get out of debt (for good), you’ve come to the right place. We’ve got 27 ideas that will help you pay off debt faster.

But before we share those tips, we need to get back to the basics.

How to Get Out of Debt

Before we jump into our practical tips to pay off your debt faster, let’s talk about how to get out of debt altogether.

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First things first: Decide that you’re done with debt—right now. That means no more swiping that credit card. No more taking out personal loans for something you can’t pay cash for. Have we hit a nerve yet? For some of you, this might be a big change of pace. But if you really want life-change, you’ve got to stop doing what you’ve always done and make room for something new.

Here’s the kicker: The only one who can change your life is you . . . but you don’t have to do it alone. And you don’t have to guess your way to freedom. That’s where the 7 Baby Steps come in. They’re going to help you get from where you are (drowning in debt payments) to where you want to be (living and giving like no one else).

Ready? Let’s start taking some baby steps.

Getting Out of Debt With the Debt Snowball

Start with Baby Step 1: Save $1,000 for your starter emergency fund. And once you’ve stored that away in a savings account, don’t touch it. This money is for emergencies only!  

Now, it’s time to go all in with Baby Step 2—paying off all your debt (except the house) using the debt snowball method.

Here’s how it works:

  • List your debts from smallest to largest—regardless of interest rate.
  • Attack the smallest debt with a vengeance while making minimum payments on the rest of your debts.
  • Once you pay off the smallest debt, take that payment and apply it to your next-smallest debt.
  • Repeat this method as you plow your way through debt. 

Baby Step 2 takes some folks a few months to finish and it takes a few years for others. If you’re on this step and laser-focused on paying off that last debt, it’s possible it could become . . . a grind. Maybe you’re exhausted and feel like it’s going to take forever to become debt-free. Don’t lose hope—you can do this!

Here’s 27 tips that will motivate you to get out of debt even faster. Finish line, here we come!

How to Get Out of Debt With Frugal Living and Smart Shopping

1. Cut those coupons.

You’ve probably heard this a thousand times—but are you doing it? You can save a ton of money just by showing a coupon to the cashier. Just be sure you’re using coupons for products you already buy—otherwise you could end up overspending on items you’ll never even use.

2. Try consignment shopping.

Kids grow out of clothes at the speed of light. And let’s be real: It’s not worth it to go into debt for your two-year-old’s ever-changing wardrobe. Check out your local consignment stores that sell pre-loved outfits in good condition. And if you’d rather shop online, sites like thredUP and Swap.com are great resources to get adult and children’s clothing—at a fraction of the cost.

3. Cut the cable.

Welcome to this millennium, where you can watch most of your favorite shows online. If you haven’t cut the cord yet, do it! Put that $100 cable bill toward your debt each month and watch just how quickly your debt snowball starts rolling.

4. Stop going out to eat.

We get it. Going to a restaurant or hitting up the drive-thru is so much easier than making meals at home. But while you’re enjoying the freedom of not having to cook for those picky eaters, you’re spending way more eating out than you would by eating in. Instead, invite friends over for taco night instead of meeting up at a restaurant. And hey—if you want to splurge for guac, we won’t judge.

5. Meal plan.

Okay, practically speaking, if you take restaurants off the table, how can you do this “meals at home” thing without stressing out? Start meal planning! You’ll cut back on the amount of money you spend on food each month. That means more of your hard-earned income can go toward paying off your debt.

6. Break up with your barista.

If you don’t know where all your money’s going each month, we’re pretty sure your favorite coffee shop can find it for you. Brewing your own coffee at home is a simple way to save money fast.

7. Visit the library.

Remember libraries? They have plenty of books and movies you can check out—for free! Your wallet has never loved movie night more than it does now.

8. Plan your grocery trips.

Make a list and stick to it! Use the calculator app on your phone while you browse the aisles to make sure you’re sticking to your budget. Do impulse items always end up in your cart? Try ordering your groceries online and then picking them up curbside at the store. Oh, and don’t ever shop on an empty stomach!

9. Avoid expensive hobbies.

Do you really have $200 a month to spend on golf? Are you serious? But it’s not just the golfers out there who need to rethink their club dues. Do you spend a ton at craft stores but never get around to starting your project? Home improvement stores can also cost you several Benjamins in one visit.

10. Ditch the gym membership.

You can still go for a run outside—for free. Gather some friends and start a running club. Or do those fancy HIIT workouts at your local park. You can get fit and healthy without spending a ton of money. Then move everything you save to your debt-free goal.

11. Find free entertainment.

Put a spending freeze on your entertainment costs for a little while. This means no going out to the movies, concerts, mini golf or whatever you do for fun that costs money. Instead, challenge yourself to find free ways to stay entertained. Take the kids to the park, go for a hike, enjoy a free concert, or look for a free event in your community.

Dave Ramsey’s Basic Tips for Getting Out of Debt

12. Make a budget!

You can’t make any money goal a reality without a budget! That’s why it’s important to do a budget every single month (before the month begins). The premium version of EveryDollar will help you budget like a pro in no time. Not only does it connect to your bank account, but you’ll be able to track your spending and even tackle your debt in real time.

13. Start a side gig.

Starting your own business has never been easier! Do you have a knack for making things? Sell your products online. Are you an animal lover? Take up dog walking or pet sitting. Whatever it is, Christy Wright’s Business Boutique is a great resource to show you how you can turn your favorite hobby into a serious money-making machine!

14. Get a part-time job.

Not into starting your own business? Then consider a different side hustle. Become a driver for Lyft or Uber. Or deliver pizzas at night to bring in extra money. You can even deliver other types of food in your spare time by working for places like Uber Eats or Grubhub. It’s a small sacrifice for extra cash in your pocket.

15. Sell the car!

The average monthly payment for a new car is $577.1 That’s just outrageous! Think about how much faster your debt snowball could move if you threw that $577 at it every single month.

16. Cut up your credit cards.

Shred ’em. Burn ’em. Shoot ’em. You’ll never get out of debt until you stop making debt a way of life. The internet will try to tell you that closing your credit card account is a bad idea. Listen closely: They’re wrong. All credit cards do is keep you stuck in the cycle of debt. Get rid of those credit cards, and never look back!

17. Use the envelope system.

When you pay with cash, you actually feel your money leaving your hands. Ouch! People tend to spend less when paying in cold, hard cash. With the envelope system, you'll see (and feel) every dollar you spend from your envelopes, and that will help you keep track of how much you’re spending.

18. Stop investing.

Yep, you read that right. And yes, we even mean stop contributing to your 401(k). Right now, you want all of your income to go toward getting out of debt. Once you’re debt-free and have saved three to six months of expenses in a fully funded emergency fund (Baby Step 3), then you can resume your contributions. By then you’ll be on Baby Step 4 and can start putting 15% of your income toward retirement.

19. Quit the comparison game.

You know who wins at the comparison game? No. One. Stop trying to keep up with the Joneses! Remember, you’re living like no one else now so that later you can live and give like no one else. In 20 years, you won’t have a financial worry in the world while everyone else will still have car loans, mortgages and credit card bills.

20. Tell the kids you’re on a budget.

When it comes to money, the kids can be a worse guide than your stomach. Be open with them about what you do and don’t have room for in the budget. And remember: Never be afraid to use that magic word: no.

21. Listen to The Ramsey Show.

The Ramsey Show will give you a daily dose of encouragement when you feel like you aren’t making progress—and when you feel like you’re crushing it too! Every day, our team helps millions of people across the country find hope and make a plan for their money. Those successes will inspire you to keep moving forward. 

Other Creative Ideas to Get Out of Debt

22. Ask for a raise.

What do you have to lose? Like Wayne Gretzky says, “You miss 100% of the shots you don’t take.”

23. Learn to say no.

Make it a new part of your vocabulary. Love it. Embrace it. Because when it comes to spending money, you’ll need to say it quite often.

24. Sell items on Facebook Marketplace or Craigslist.

Haven’t you heard? One person’s trash is another person’s treasure. Dig through your kids’ rooms and the black hole of your closet to find things you can part with to make some quick cash.

25. Go on a spending freeze.

Challenge yourself with a no-spending day or a “nothing but the essentials” month, aka a spending freeze. This is a great way save some extra money—so you can chuck it at that month’s debt payoff goal.

26. Give more.

Wait a minute—give? Yes! Giving changes you. It changes your spirit and takes your focus off of you for a minute. Make giving a priority in your budget, no matter what your income is, and you’ll feel like a million bucks.

27. Find accountability.

Getting out of debt is hard. When you have to say no to friends, concerts and going out to eat, it’s even harder. That’s why it’s important to find someone you trust to hold you accountable to your goals. It can be your spouse, your best friend or even your neighbor. Just make sure it’s someone who will actually hold you to it.

Traps to Avoid When You’re Getting Out of Debt

Okay, now that you’ve got tips on how to get your debt snowball rolling, let’s talk about some things that could trip you up along the way. Here are a few traps to avoid as you baby step your way to debt freedom:

1. Debt Consolidation

You’ve probably heard of it. And maybe you’ve even fallen prey to it. But hear us out: Debt consolidation is a bad idea. With consolidation, combining your debts for a lower interest rate will make you feel like you’ve done something to help your situation . . . but in reality, it’s only going to keep you in debt longer.

The only form of debt consolidation we can get behind is student loans. Read more about that here.

2. Credit Card Balance Transfers

Just like debt consolidation, credit card balance transfers will only offer you a temporary solution. Sure, it might give you a little extra breathing room in your paycheck, but it’ll keep you in debt for longer. Why? Because you’ll be tempted to spend those “extra” dollars on something other than your debt. Remember, the only way to beat debt is by throwing everything you have at it—until it’s gone.

3. Filing for Bankruptcy

When you’re scared and don’t have enough money to pay the light bill, it can feel like bankruptcy is your only option. If you feel that way, it’s time to slow down, take a deep breath, and remember that there’s hope. Bankruptcy shouldn’t be your first go-to. Sometimes it is necessary, but we want you to do everything you can to avoid it. And we’re here to help.

The road to debt freedom can be tough. But remember, your future is worth the work you put in today. You can do this. With Financial Peace University, you can learn the step-by-step plan to pay off debt and save more money even faster. Get FPU—plus tools like the premium version of EveryDollar to help you take control of your money—exclusively in a Ramsey+ membership. Try it today in a Ramsey+ free trial!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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