Ways to Get out of Debt: The Cool, the Uncool & the Insane

In this article, we take a look at the cool, the uncool and the insane ways that you can get out of debt. 

Yes, it’s a little fun. But there are also some great tips.

Borrow From The Mafia - Rating: Insane

When you find yourself in debt, you may find yourself asking…

“Who has lots of cash and is liberal in who they give it to?”

The obvious answer…organised criminals.

If you haven't guessed, this is a VERY bad idea. Not only is borrowing money from organisations like the Mafia feeding criminal activities and likely to result in catastrophic consequences if you don't pay them back. But it also isn't getting out of debt, it is just shifting it from one lender to another. 

 

Borrow From Your Family - Rating: Uncool

Less dangerous, but equally as pointless as borrowing from the Mafia, is borrowing from your family. After all, you are just shifting the debt from one place to another and aren't putting yourself in a better position. 

Although this can be beneficial if the interest on your debt is high and your family member will accept less or no interest, you still have to go cap-in-hand, which is something most family members will never let you forget.

 

Create A Realistic Budget - Rating: (Very) Cool

If you want to make a bigger impact on debts but have no way of earning more, you will need to look at freeing up cash from your existing budget – and that means being more realistic about your spending.

Use last month’s bank statement to help create an income and expenditure plan. It will show you where your money goes and help you budget better. If you’ve never done this exercise before, be prepared, because you will undoubtedly be wasting cash.

Set yourself a savings goal and aim to reach it or beat it. The more savings you can eek out, the quicker you can pay off your debts. Even a minor change, such as ditching your regular lunchtime latte could save you in the region of £600 per year

Revise your budget where necessary and stick to it!

 

Gamble - Rating: (Very) Uncool

Trying to gamble your way out of debt is a risky and frankly stupid approach. Regardless of how good you are or how lucky you have been in the past, there is every likelihood that you will find yourself in more debt as a result of any money you gamble.

Just don’t do it.

 

Sell Unwanted Items - Rating: Cool

We all have some stuff around our homes or locked up in our garages that we either don’t want or don’t use. When you are in debt, this is the best time to sort through all these items and get rid of anything that you can sell.

Not only does this make you some cash, but it will also help you clear space.

 

Take Out A Payday Loan - Rating: Uncool

Debt is debt. Although it can be sensible to shift that debt to a product with a more reasonable rate of interest, you should try to avoid taking on additional debt as a ‘quick fix’ to ongoing money problems; especially convenience credit such as a payday loan, since this type of loan is one of the most expensive forms of credit you can take out.

 

Pay More Than Minimum Payments On Debts – Rating: (Very) Cool

Once you’ve addressed your spending habits, you should find that you have more disposable income than before. While it might be tempting to fritter away your newfound wealth with shiny new things, stay strong and use it to increase your minimum payments.

Paying more than the minimum payment on a regular basis can bring down the balance significantly over time and result in big savings on interest charges.

 

In Summary

Although we have covered some laughable techniques, if you are in debt, you will know that it is no laughing matter. The best way out is through smart budgeting and looking to make some extra cash sensibly - and we all agree, having less debt is definitely VERY COOL.