Tips For Lowering Your Debt This Year

Debt is a huge problem – and the pandemic didn’t help things. Many americans found themselves having to take on more debt to make ends meet or to pay down old debt. 

According to Experian, the average American has a little over $6000 in credit card debt

If you can relate to feeling like you’ll never be able to lower your debt, whether it’s due to the interest taking over all of your payments or just not having the finances, here’s some tips that may help you lower your debt this year. 

Tips For Lowering Your Debt This Year


If you’re out of work due to the pandemic or simply just aren’t bringing in enough money each month to make a difference in your debt, consider freelancing. 

You don’t have to do it full time to make a decent income from it AND it could be the solution you need to stop worrying about how to pay off credit card debt

Here’s some common ways you can make money as a freelancer:

  • Online content writing
  • Graphic design
  • Web development
  • Software development
  • Translation services

Whatever your skills are you can probably use them to bring in an an additional income freelancing each month. 

See Also: How to Make the Jump to Freelancing Full Time

Start an online business

Don’t just pick up freelance work. Also, considering starting an online business. 

It can be something as simple as starting an online dropshipping business or selling items that you create on a marketplace such as Etsy. 

See Also: How to Start a Service-Based Online Business AND Make Money From It

Pick up a second job

If your schedule permits it consider picking up a second job. It doesn’t have to be a full time job – a part time one will do. 

Additionally, it can be temporary. You can use solely use the income earned from the second job to pay down your debt and once that’s gone and you have an emergency fund you can go back to just working your primary job. 

Think about seasonal work, such as around Christmas. An additional job for a few weeks can enable you to pay down your debt without overly exhausting yourself in the process.

Start a remote job

If you’re out of work due to the pandemic, or have other reasons why you cannot work an out of the home job, consider remote work. 

This allows you to work a full, or part time, job with benefits from home. However, it differs from freelancing because you have a set work schedule that you must follow. 

An example of this would be customer service work. Many customer service, and even tech support, agents are working from a home office full time instead of a call center. 

See Also: Where to Look For Remote Jobs

Adjust your budget

Sometimes lowering your debt can be as simple as adjusting your budget. 

Start meal planning to tighten your grocery budget, go through your subscriptions and cancel the nonessentials, get rid of some of the bells and whistles on your phone plan, etc. 

You may have to downgrade your current lifestyle for a few months, but the reward will be having more control of your income once you have paid off your debt.   

Pay off the highest interest rate debts first

The most important rule of paying down debt – especially credit card debt – is to get rid of any debts that have high-interest rates attached.

Focus on dedicating as much of your income as possible on high interest rate debts, while continuing to make the minimum payments on lower income debts. 

Once one debt is paid off continue the cycle until all debts are paid. 

Set debt payoff incentives

Reward yourself every time you pay off a different debt. 

It can be something as simple as going on a short trip, or treating yourself to a nice meal. 

It’s the little things that will allow you to stay motivated and allow you to take in the progress that you’re making on your debt. 

Reduce your spending

The easiest way to make a dent in debt is to reduce your spending so you have more money available to put towards your debts. 

Reducing your spending is a little different than budgeting as it allows you to keep some luxuries. 

Here’s some ways that you can reduce your spending: 

  • Commit to purchasing groceries instead of eating out
  • Switch to a streaming service instead of paying for cable
  • Stop spending money on apps on your phone
  • Cancel any memberships/subscriptions that you’re not using

Freeze your credit cards in water

A little extreme maybe, but for many people, they’re physically unable to stay away from their credit cards.

Some people recommend cutting up your cards, but this a permanent solution to a temporary problem. 

The alternative is to freeze them. That way you can still use them in an emergency, but you must really work to get them out again.

You can lower your debt this year

You don’t have to be in debt forever. You can purchase that home or improve your credit score this year. 

Apply a few of these tips to your financial situation and watch the debt start melting away. 

Tips For Lowering Your Debt This Year


  1. Briana Baker says:

    All great advise! We are getting close to out of debt (mortgage and a few student loans to go!)

    1. Student loans are what I’m working on as well.

  2. Sarah Bailey says:

    These are some great ideas, I would love to set up some type of store, I think that would be fun and a great way to pay down debt.

  3. Jenn says:

    These are smart tips. Making smart financial decisions is so important for a more secure future.

  4. Catalina says:

    These are good tips. I should definitely try them this year!

  5. Gervin Khan says:

    Great tips to lessen your debt or have a debt-free life. Gladly, I paid all our debts before the lockdown happens.

  6. Josh Mckenkey says:

    Thanks for the awesome tips we have a huge debt this month

  7. Nikki Wayne says:

    Love all your points. Thanks for sharing, this helps a lot.

  8. Monica Simpson says:

    Paying off the hightest interest first is a good tip. So is freezing the cards! I should do that. 😉

  9. Tara Pittman says:

    Lowering debt is a good thing. These are awesome tips

  10. Amber Myers says:

    Great tips! Thankfully our only debt is the house so we’re working on paying that off faster.

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