Apply These 6 Techniques to Reduce Debt – Tame Your Enemy Now

By | January 20, 2019

techniques to reduce debt


“Do not save what is left after spending, but spend what is left after saving.”

Warren Buffett

Debt sucks. There’s no way to deny this fact anymore. It costs you money, ruins your financial life, lowers your credit score, and brings a lot of stress in your life. But here’s the thing. If you’re determined to get out of debt and make it your top financial goal, then attaining financial freedom can be easier than what you think.

Here are a few effective techniques that can help you reduce debt and tame the biggest enemy of your financial life.

1. Negotiate with your creditors for a lower interest rate

Call your creditor and request for a low-interest rate. If the customer care representative can’t help you, then speak to the supervisor about it. Use sugar-coated words to charm the supervisor and explain your financial situation to him. Explain that you have lost your job or have a medical issue due to which you’re in financial hardship. If you have been a good consumer, then the supervisor may agree to lower your interest rate for keeping the business.

2. Create a budget to control your expenses

If you don’t have a household budget, then it’s better to create one right now. A household budget tells you where your money goes every month. It also tells you where you should control your expenses and save money, which is extremely important when it comes to paying off debts.

Create a budget on the basis of the minimum amount you earn every month so that you can stick to it even with an irregular income. Create categories for each expense and set a limit for it. If you have allocated $100 for entertainment, then you shouldn’t spend more than that in a month.

Your goal should be to spend less than what you earn because that would help you save money and get rid of debt soon.

3. Settle your debts as soon as you can

This is a good technique to use when you don’t have enough money to pay the full amount. In this technique, you save an amount every month and then start the negotiation process with your creditors. Here, you negotiate with your creditors for a lower payoff amount since you’re already in a financial crisis and want to eliminate debt quickly.

Let’s say you owe $15,000 to a credit card company. You’re in a financial crisis and your monthly income has dropped. You’re past due on your accounts and decide to settle them as soon as possible. One day, you call your creditor and politely explain that you can pay only $8000 (a hypothetical figure) to him. Your income has dropped significantly and you can’t pay more than $8000. If the creditor agrees to your proposal, you can pay $8000 within a specified date and get rid of debt instantly. Your net savings will be $7000.

If your oratory skill isn’t good, then you can hire a debt settlement company for negotiating with creditors on your behalf. It’s just that you have to pay a fee to the settlement company.

4. Pay more than the minimum on your debts

Put more money towards your debt whenever you can. This can help you get out of debt soon. If you can make extra payments on your debts every month, then that is even better.

You can follow 2 techniques in this case. The first one is the debt snowball method. The second one is the debt avalanche method. In the first technique, you make extra payments on the smallest debt every month till it is paid off. In the second technique, you make additional payments on the highest-interest debt every month till you get rid of it.

5. Sell all your unnecessary items

Explore all the rooms in your house and pick the items you no longer need. Store them in a big basket and host a garage sale at the weekend. If you have a piece of old furniture you don’t need anymore, you can sell that too on eBay and increase your cash flow. Use the money to reduce your debt.

6. Find out ways to increase your income

When your income is high, it becomes easier for you to pay off debts. If you’re unable to pay off debts even after controlling your expenses, then you need to increase your income. Search for a better paying job or get a side hustle to increase your income. Don’t get panicked just because you have to do some extra work in case you decide to take up a second job. This is only for a short period. Once you get out of debt, you can leave it.


Are you weighed down by debt? If so, then wake up buddy and chalk out a plan to eliminate your debt. If you haven’t created a plan yet, then use the aforementioned tips to get out of debt fast. Debt doesn’t do anything good to your financial life or mental health. Trust me, the sooner you get rid of it, the better.

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