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5 Debt Solutions for the Average Person that Don’t Cost Money

Somebody in debt is the last person who should be spending more money to try and get out of it. Having been there and done that, contributor Andy Shuler has 5 great debt solutions ideas to get out of debt that don’t cost a dime. He shares them here.

wiping out debt

Having debt is extremely costly.  I honestly cannot think of something that is actually so expensive. 

I mean, think about it – when someone tells you that they’re in credit card debt, is it usually because they had to be or because they were just being irresponsible with their money? 

I’m sure that there are definitely people out there in the world that have had to go into credit card debt to pay for hospital bills, or for groceries that they otherwise couldn’t afford, or maybe even to help keep their personal business alive (not an ideal use of a credit card, but there are worse ways).

But if you’re anything like me, the main reason is that people are blowing their money on things that they just flat out do not need. 

My Debt Story

Hey, take it from me for example.  When I received an offer from my employer for a full-time position after college graduation, I still had an entire semester of school left. 

I decided that I was going to “treat” myself. 

My “treat” was that for the first time since I was 14, I wasn’t going to work.  Instead, I was going to rack all of my expenses up on my 0% interest credit card and pay it off once I started working. 

Why would I do this?  I deserved it. 

I busted my butt through college and got a great job offer and wanted to have fun.  And while I’m at this point of “treating” myself, I shouldn’t be frugal, right? 

I should really do it up big.  So, I’ll go on a nice Spring Break trip too.  And since I’m not working, I now have about 35-40 extra hours a week to do fun things, so let’s do all of that and spend money. 

Long story short, I was up to $8,000 in debt in one semester.  Insane.

All in all, did this situation work out for me?  Yes, it did, fortunately for me, but sometimes life hits and that would’ve completely screwed me over. 

If my offer was revoked for some reason, or somehow, I had missed a class and my graduation was pushed back, or maybe I had some other major expenses come up – guess what, I would’ve been SOL. 

But this worked out for me because I was lucky by avoiding any major expenses or bad luck and by really focusing…and even utilizing a few of these free debt solutions below:

1. Pay off your loans economically

This was HUGE for me.  I know that Dave Ramsey recommends the Debt Snowball method, and that’s fine if that’s the way that you will be motivated to pay off your debt, but you will pay more in interest and it will take longer – and that’s a fact. 

I, instead, focused on the Debt Avalanche method, which is where you pay off your highest interest loans first and then move on to lower interest loans. 

2. Work with a non-profit for credit counseling

One that I have seen great reviews about is InCharge Debt Solutions.  They can help you in various ways such as credit/loan counseling, debt management programs, debt consolidation programs, and even simply providing education so you can become well-informed about financial terms and options to help you now and going forward in your life.

3. Take advantage of your credit cards with a balance transfer

I’ll admit, I have taken advantage of this at times in my life.  Sometimes a credit card will offer you the ability to transfer a balance onto that credit card for a low, or no, interest rate for X amount of time. 

The exact offer that I took advantage of was to transfer $6000 onto a Chase credit card for 0% APR for 12 months, but it would cost me a 3% fee on the total amount transferred. 

So, essentially it cost me $180 ($6000*3%) but it saved me $1,320 in interest that 12 months as 22% APR of $6000 is $1,320, so in total, I was $1,140 better off after the $180 fee. 

You still have to be very dedicated and pay off your loans aggressively, but this can help out quite a bit.

4. Consolidate your debt into one low interest loan

This is very similar to the concept of a balance transfer, but this is different in the sense that you will still likely have an interest rate that you’re paying. 

I know that the title of this article says debt solutions that don’t cost money, and although this has a fee, it won’t cost you money as long as your consolidated debt loan is lower than the weighted average APR that you are paying. 

This is incredibly important to calculate so you know the barrier, or “hurdle rate”, that you must overcome to make this worth it. 

In addition to saving money on your actual debt, I think a consolidated loan does have some non-monetary benefits in the sense that you simply can apply all of your money towards one loan rather than having to determine how best to apply any extra cash at the end of the month.

5. Cut unnecessary expenses

This likely seems the most obvious, right?  Yes, this could include the common methods like stop buying coffee at Starbucks or stop going out to eat for lunch every day, but I mean even more significant changes.  Like what, you say?

Sell your car

Find a way to live off a cheaper car, or even no car at all.  Maybe you bike to work, or carpool, or split a car between yourself and your spouse.  If it’s important enough, you’ll find a way to make it work.

Cut all Cable and WIFI

I know, this one seems so hard, but you can do it.  I have a friend that is like this.  He watches anything he wants on his phone. 

There are other forms of entertainment that are free, like reading books at the library, renting movies from the library, going on a walk or hike, or just rewatching DVDs that you might already own. 

Again – this gives me anxiety to think about life without WIFI, but isn’t that sad?  Maybe living without WIFI would be good for all of us…

Discount Diet

This is a bit of an extreme as well but sometimes I like to do this for fun.  Usually once a month my wife and I will challenge ourselves to see how little we can spend on our grocery budget for that week. 

So, what does that exactly entail?  Budget items.  Rice and beans, meat that is on sale that week, cheaper vegetables, bananas instead of a more expensive fruit like berries or apples, in season vegetables, and many other similar foods. 

You don’t have to go full only eating eggs, PB&J sandwiches and rice and beans, but maybe you decide to do that just for your lunches at work? 

Or, maybe you just decide to meal prep for a week, so you can cook in bulk and minimize waste. Maybe you eat steak every night for dinner at $6.99/lb. and you switch to chicken that week at $1.88/lb. at Meijer.  3 pounds of meat is a savings $15.33/week. 

By no means is that some huge, life changing amount, but if you did that every other week for a year, that’s $400 more you could put on debt. 

That alone will likely not get you out of debt, but when combining it with the other ideas I’ve mentioned, it can certainly help!  As with anything, it comes down to how dedicated you are.

Debt Solutions Overview

All in all, each one of these debt solutions are “free”, or at least much cheaper than the alternative of continuing to live in debt. 

I highly recommend that if you find yourself in a bad financial situation that you take these methods to heart and start to implement some of them. 

Debt can be very costly, not only financially but also emotionally.  Having a lot of debt can truly make you depressed and not enjoy things like you used to. 

At the end of the day, debt is not something that just happened – it happened because of your decision making. 

So, make the decision to utilize one of these debt solutions– and get out of debt! 

It comes down to a mindset, and if you’re not determined to make it happen, it won’t happen. 

Don’t be one of those people – take your debt by the horns and get going.