Chances are you have debt -- and lots of it. The average amount owed per consumer is
What's your strategy for paying it down? Sometimes in the fight against debt, the money's actually there: It's simply a matter of crafting a budget, reining in your spending and funneling more of your income to pay down the debts. Other people need to get creative -- and work even harder -- to bring in extra money to tackle their debt.
Read on for inspiration from seven people who paid off as much as
Avoid the Minimum-Payment Trap
Names:
Debt:
An accountant, Lance sought to explain to Victoria the value of paying off the debt as soon as possible. So he searched the Web and found a downloadable spreadsheet that showed the true cost of making only minimum payments - in Victoria's case,
Convinced, Victoria cut discretionary spending from her budget and put the rest of her take-home pay as a nurse toward her debt each month. She started tackling the highest-rate loan, which had the highest balance, first to pay less in interest over time. To generate extra cash, the couple also sold what they didn't need, Victoria worked extra shifts, and Lance started blogging -- all of which helped them wipe out her student-loan debt by
You can read more about how they tackled their debt in Lance's blog, Money Manifesto.
Cut Spending
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Debt:
In 2010, the Johnsons both were working and making a nice living, but somehow their dual incomes weren't enabling the couple to save. They had about
They started tracking their expenses because they had no idea where all of their money was going each month. They found that they were shelling out at least
About a year into their debt-repayment efforts, Holly started earning extra income from freelance writing and from her blog, Club Thrifty, which helped them wipe out the entire
Get a Side Job(s)
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Debt:
By the time
In addition to working as a financial analyst at a small investment banking firm, Schroeder-Gardner found other ways to make money. She earned cash by taking surveys, getting mystery shopping gigs and selling stuff on
Sell What You Don't Need
Names: Deacon and
Debt:
Within a month of getting married in 2008, Deacon Hayes and his wife, Kim, combined their finances and realized how much debt they had:
Their repayment plan included tracking everything they spent and selling anything they didn't need. They went through cabinets, drawers, bookshelves and closets to identify what they hadn't used during the previous year. Kim sold designer clothes and purses on
The couple also slashed their monthly costs by eliminating expenses such as cable TV, gym memberships, restaurant meals and massage therapy. And Deacon got a second job delivering pizzas to earn extra cash. Within 18 months, they paid off all of their debt. You can read more about how they did it on his blog, Well Kept Wallet.
Get Roommates
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Debt:
She couldn't get a second job because her schedule as a reporter was so unpredictable. So she spent money only on necessities and put any extra cash she got (from birthday gifts or occasional freelance writing jobs) toward her debt. A year later, she upped her debt payments even more by simultaneously cutting her travel costs and landing a bigger paycheck via a new job more than 150 miles away, where her boyfriend lived.
But it wasn't until her third year out of school that she was able to wipe out her debt completely by moving from a one-bedroom apartment to a three-bedroom house and getting two roommates to slash her living expenses. Her monthly rent dropped from
Downsize Your Home
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Debt:
In 2007,
So they took drastic measures. In addition to dramatically cutting their day-to-day spending, they moved from a 3,200-square-foot home into an 800-square-foot rental townhouse with their two children (they now have four). Their house payment dropped from
Lauren shares her money-saving tips on her blog, I Am That Lady.
Use Psychological Tricks
Name:
Debt:
In 2004,
For his first trick, he made certain stores -- such as bookstores, electronics retailers and comic-book stores, where he would buy things he wanted but didn't really need -- disappear from sight by avoiding them during his local travels. His next trick? Roth bought time. If he was ever tempted to buy an unplanned item, he would scribble a note about the item and its price. When he got home, he would record it in a computer file. He says he would wait weeks before looking at his list, then ask himself whether he still wanted any of the items. Separated from temptation by both space and time, Roth crossed most items off the list. He gave himself permission to buy only the items that remained on his list after 30 days. By 2007, he was debt-free.
During his three-year debt-reduction journey, Roth created the Get Rich Slowly blog (then sold it in 2009). He now shares his debt-reduction strategies through Moneytoolbox.com, an online money-management course.
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Cameron Huddleston is an online editor at Kiplinger's Personal Finance magazine. .