One of the best New Year’s gifts you can give yourself is to get out of debt in 2025. It’s totally possible to achieve in a year’s time for many people. Here are some tips to help you spend less and pay down your debt faster.
Curtail Spending
It’s not helpful to get out of debt only to put yourself back in the hole by spending again. Naturally, you can’t cut back on necessities like groceries, mortgage, insurance, and such. But you can certainly curtail your spending in other ways. Here are some simple ideas. See which ones you might be able to implement in your life:
Avoid Social Media
Social media can be a positive thing. It helps some people feel less alone, or to instill a sense of community and togetherness. But there’s a trend these days to tout lifestyles through product promotion. You’re likely to spend more when you see the latest and greatest gadgets that influencers make look like the greatest thing since sliced bread. Sure, you’ve already got a perfectly fine can opener in the kitchen drawer, but now they have one that you just press a button and the can is opened! This is the kind of thing you can live without. Social media is full of temptations like these and for someone trying to get out of debit, it’s best to limit your time with social media.
Avoid the Sales
Each week, you may peruse your local grocery store’s sales flyer, planning your meals based on what’s on sale. But are you absolutely sure you don’t have plenty of food in the pantry and freezer already? A sale is great if it’s something you need, but you’re not helping your cause if you’re buying something just because it’s a few cents cheaper than usual.
Repair, Not Replace
Before tossing away things that are old or broken and replacing them with new items. Take a closer look and see if you can get by with it for a little while longer with a little bit of TLC. That pilly sweater can get revived just by running a razor blade over the pills. That torn pocket on your overcoat can easily be stitched up with very basic sewing skills.
Look for more ways to cut your spending and you’ll find that you have more money left over to put toward paying off your debt.
Consider a HELOC
A home equity line of credit, available to those with sufficient equity in their home, can be used for anything, even if it’s nothing to do with improving your home. In other words, if you can get it for less interest than your debt loans, you could use it to consolidate your debt and be debt-free in 2025. Just bear in mind that you’ll need to pay off the HELOC as soon as possible.
Get a 401(k) Loan
If you have a 401(k), you can borrow against it, often up to $50,000. You’ll have about five years to repay it, and repay it you must if you’re to ensure a safe retirement. Just remember to never borrow more than you need, because this is about getting out of debt, not finding more ways to be in debt!
Switch Services
Companies like to hike up prices for customers they’ve had for a long time. As soon as you see a rate going up, start looking elsewhere. For example, if your website hosting service is going up to its regular rates, you can easily switch things to a new host and get introductory rates.
Take an hour or two and research balance transfer credit cards. You may be able to get an interest free credit card for a year, which is a decent amount of time to pay down the balance on that card. Just be sure not to keep charging on the card. You want the balance to go south, not north.
Take on a Side Gig
With just a few hours a week, you can work a side gig and put all those wages toward paying down your debt. Side gigs are abundant on the internet. Some of them don’t even require you to leave the house. Every extra dollar you can put toward your monthly debt payment is an extra dollar you don’t have to pay interest on.
Make Bi-weekly Credit Payments
Have you ever heard of that strategy where people pay their mortgage off early by making two payments each month instead of one? Well, the same “trick” is effective for your credit card debt. There’s no law saying you can’t make payments before your bill arrives or make payments twice a month instead of once a month. The earlier you pay, the less interest you’ll end up getting stuck with. And again, if you can add an extra buck or two to each payment, that will pay off in the long-run by bringing that balance down.
Trade High Interest For Low
If you have a number of high interest loans, look around and see if you can get a cheaper loan rate somewhere else. Then you can get the new loan and use that money to pay off the high-interest loan. At least you’ll be paying a lower interest rate, which can help you to get out of debt faster.
Sell Items You No Longer Use
Another way to get out of debt in 2025 is to sell things you no longer need or use. You won’t be joining the billionaire’s list this way, but it will generate some extra cash for you to put toward your debt. There are lots of online marketplaces to choose from, like Facebook Marketplace, Poshmark and even Craigslist.
The key to getting out of debt is two-fold. You need to pay more toward debt and spend less. Hopefully, you’ve gotten some good ideas here that you can easily implement in your household. For more helpful information about handling money, consult with your CPA.
by Kate Supino