Lesser Known ways to get out of Debt

The transcription discusses 15 lesser-known but effective strategies for getting out of debt quickly. These strategies include leveraging peer-to-peer lending platforms, negotiating debt settlements, seeking charitable debt forgiveness, participating in debt-free challenges, using a cash envelope system, volunteering for free room and board programs, debt recycling, using windfall gains wisely, creating a debt thermometer to visualize progress, joining a debt support group, utilizing debt reduction apps, finding a mentor or accountability partner, hosting cash-only side hustles, switching to a cashback debit card, following the 1% rule, and investing in oneself to increase earning potential. By combining these strategies with the right mindset and discipline, individuals can break free from debt more quickly than traditional methods alone. Lesser-known but highly effective strategies that could help you get out of debt quickly. Number one, leverage peer-to-peer lending. Borrow from peer-to-peer lending platforms. Peer-to-peer lending platforms like LendingClub or Prosper Connect borrow directly with individual vendors. Often, these platforms can offer better interest rates than traditional banks, especially if your credit score is decent. This could help you consolidate high-interest debt into a more manageable lower-interest loan. Number two, ask for debt forgiveness. Negotiate settlements. If your debt is overwhelming, especially credit cards, medical bills, or collections, you might be able to negotiate a settlement. Creditors may agree to accept a lump sum that is less than the total owed, especially if they believe you are at risk of defaulting. This can be a great way to pay off a large amount of debt at once for less than you actually owe. Charitable debt forgiveness. In rare cases, some charities and non-profits are willing to help individuals pay off debts, particularly medical or housing-related debts. Research organizations or local non-profits that may offer such programs. Number three, debt-free challenges. No-spend challenges. Dedicate a month or more to not spending any money on non-essential items. Use every dollar you save to pay down debt. These challenges work well when done with a community or friends, so you can hold each other accountable. Gamify debt payoff. Treat your debt like a game where each milestone brings a reward. For example, for every $1,000 a bit paid off, you allow yourself a small treat, like a fancy coffee or a movie night. This can keep motivation high over the long haul. Number four, cash envelope system. Using cash for discretionary spending, the cash envelope system forces discipline. Allocate a specific amount of cash for each spending category, groceries, entertainment, and only use what's in the envelope. When it's gone, it's gone. This method prevents overspending and allows more money to be put toward debt. Volunteer for a free room and board, WWOOFING, or work-away programs, if you want a radical lifestyle change. While getting out of debt, consider programs like WWOOF, Worldwide Opportunities on Organic Farms, or Work-Away. In exchange for volunteer work, you receive free room and board. This can allow you to eliminate living costs while earning money from other work or side gigs that go directly toward debt. Number six, debt recycling. Tax-deductible debt switch. For those with both high-interest consumer debt like credit cards and tax-deductible debt like mortgage, you could consider recycling your debt by increasing your deductible debt like refinancing your home loan and using extra cash to pay off high-interest non-deductible debt. You may reduce your tax bill while paying off debt. Use windfall gains wisely. Resist lifestyle creep. Whenever you receive a windfall, whether it's a tax refund, bonus, inheritance, or even lottery winnings, put 100% of that money toward your debt instead of upgrading your lifestyle or making impulse purchases. Windfalls can create you a massive push toward being debt-free if used correctly. Number eight, create a debt thermometer. Visualize your progress. Create a physical or digital chart like a thermometer where you can visually track your debt repayment progress. Each time you make a payment, fill in more of the chart. This can be incredibly motivating, especially if the visual representation makes your progress more tangible. Number nine, join a debt support group. Accountability groups. You are not alone in your debt journey. Joining a debt support group can offer emotional support, encouragement, and practical tips. Whether it's an online community like Reddit's personal finance groups or local meetups, having a group that understands your challenges can help you stay on track. Number 10, use technology to stay on track. Debt reduction apps. There are a number of apps specifically designed to help you get out of debt quickly. App Selectality, Undebted, or Debt Pay Off Planner allow you to input your debt's chart progress and suggest the best strategies to pay them off. Some also allow you to automate payments or manage payment schedules, keeping you organized. Number 11, find a mentor or accountability partner. My brain does that. It's crazy. Debt mentor. If you know someone who has successfully paid off a large amount of debt, ask them to be your mentor. Having someone who has been there, done that, can offer you valuable advice and help you avoid pitfalls. Accountability partner. An accountability partner, friend, partner, or family member can keep you in check. Set regular check-ins or review your budget, debt progress, and spending habits. Number 12, host a cash-only side hustle. Host events or classes. If you have a school or hobby that others are interested in, consider hosting events or classes in your local community for cash. Teach people how to paint, play music, do yoga, or even cook specialty meals. It's a fun way to make extra cash without requiring significant startup costs. 13, switch to a cashback debit card. Maximize rewards while being responsible. Some debit cards offer cashback rewards similar to credit cards without the temptation of going into debt. Use these cashback rewards towards debt, combining smart spending with discipline. 14, use a 1% rule. 1% extra pay means commit to paying just 1% extra each month towards your debt. While it may seem small, even a slight increase can make a substantial difference over time by reducing your interest in principle. This approach is gradual, easy to implement, and substantial long-term. 15, invest in yourself. Increase your earning potential. While cutting expenses and budgeting are important, increasing your income is often the fastest way to get out of debt. Consider investing in new skills or certifications that can increase your earning potential. Short-term sacrifices like taking late classes can lead to significant long-term gains and faster debt payoff. By combining these strategies with the right mindset and discipline, you can effectively break free from the cycle of debt more quickly than traditional methods alone. If any of these ideas resonate, please share them.