25 Proven Methods To Get Out Of Debt In 2025
Ready to break free from debt? Explore 25 actionable ways to regain control of your finances in 2025 and pave the way to a debt-free life.
Get Out of Debt Once and For All
Getting out of debt is a huge step, especially for most Americans. In our culture, we are celebrated for being influencers, rich athletes, and owning billion dollar corporations. That’s not the reality for most of us. When my husband and I made the decision to live below our means, people thought we were crazy. The fact that we have 5 kids, baffles people even more. However, it is possible! One major step is getting out of debt once and for all!
Create a Debt Free Goal
The first step in getting out of debt is making the decision to get out of debt. If you’re married or have a family, it will surely be a group effort. Everyone has to be on board. If you have kids, they will need to know sacrifices will be made, especially if they’re used to a certain lifestyle. Make it a game and offer incentives along the way.
Know What Debt You Have
You will need to know what debts you have and write them down. You can’t proceed until you know where every single debt is at. Our FREE 20 page Budget Starter Kit can help!
Build an Emergency Fund
There is no point in starting to pay debt off without an emergency fund. As soon as something comes up, and it will, if you don’t have the money for it, it will get thrown on a credit card. Trust me on this one! Dave Ramsey recommends a $1000 starter emergency fund, others would say $2-3000. We personally started with $6,000.
>> Do You Really Need an Emergency Fund? + How to Make One <<
Stop Acquiring New Debt
There’s no point in paying off one thing to immediately get something else you’re going to have to pay off. You may have to get scrappy, be patient, or live without things, but you made a commitment, so stick to it! It’s not forever.
>> How to Save Money Fast on a Low Income <<
Pick a Debt Payoff Method
If you’re just throwing money at all your debts you’re going to get nowhere fast. You need to pick a debt payoff method. There is the debt snowball, where you pick the smallest debt and attack that. There is the avalanche method, where you pick the highest interest rate and chip that one. I personally combine the two. If I have a debt that has a high interest rate and it’s not much more than my other debts, I attack that one first.
Focus on One Debt at a Time
If you have credit card debt, a mortgage payment, car payments, medical bills, etc choose one debt that you’d like to attack first. If you’re in the US, medical debt is something that can become inevitable for most people. You’re also likely to have a mortgage for most of your life. I, personally, would focus on “bad debt”, meaning your credit cards and car payments.
Commit to Changing Your Spending Habits
As with minimalism, it’s silly to declutter 100 items, only to go out and buy a bunch of crap you don’t need. The same with debt payoff. If you know you’re overspending on unnecessary items, you have to work on that.
Create and Stick to a Budget
Not only do you need debt repayment to be a part of your budget, you need to make sure you’re following and sticking to a budget. If you don’t, you won’t be bringing in any extra money to go towards your debt. A budget is simply telling your money where to go.
>> How to Create a Budget to Save Money <<
Refinance, Consolidate, or Lower High Interest Loans
When we started paying off debt, we had numerous credit cards. It was hard to keep up with. There were also some with stupid high interest rates. The first thing we did was to try to get them lowered. When that didn’t work, we ended up consolidating them to a much lower interest rate at my husband’s work credit union. This made it from 3 payments to one, a much lower interest rate, and a more manageable payment. Then, we were able to chip away at it faster. You can also refinance your mortgage or car payments, but ours are actually lower than the ones you can get now, so be smart about it.
Increase Your Income
You can only reduce your expenses so far. A lot of people are just overspending, but some aren’t bringing in enough or aren’t going to pay off debt very quickly unless they increase their income. Work overtime, get a second job, find a work from home job or side hustle. We have done Doordash periodically over the last several years and it helped tremendously.
>> The Best Authentic Side Hustles for Moms <<
Use Your Extra Money Wisely
While some were using their stimulus checks on frivolous purchases, we were building our savings and paying off debt. That was a huge help into getting to be able to survive this current economy, with 5 kids no less (and no, we didn’t have 5 kids when we got those checks).
>> How To Spend Your Tax Refund <<
Sell Unused Items
Some people will say to sell everything you can. While I definitely think you don’t need to keep things you aren’t using, I actually regret selling everything the first time we tried to get out of debt. There were several items I had that I would still love to have, but I got rid of because I knew they were worth money. The silly thing is, I could probably be using them to save or make money right now. Also, value your time and energy. It’s not worth the $5 you’re getting if you have to spend time, gas, and money to sell it.
>> 101 Things to Declutter Right Now in 2025! <<
Cut Unnecessary Subscriptions
We got rid of cable and satellite TV only to have a dozen different TV subscriptions. It’s not just for TV though. It seems like just about everything requires a subscription now. If you’re not using it, it’s not worth the money. You may also need to cancel a few things during your debt repayment period, just to meet your goal.
>> How to Save Money on Streaming Services in 2025 <<
Reduce Luxury Items
Americans love to blame everything on the economy, but the fact is, most of our spending is just unnecessary. Eating out, closets full of clothes, vacations we can’t afford, name brand groceries and products, video games, the list goes on. Learn the difference between actual wants and needs. If it’s not a need, it’s a want and it can be reduced or removed during this time period.
>> How to Have a No Spend Month in 2025 + Free Printable <<
Downsize What You Can
This one is tricky. It used to be recommended to downsize your house or car in order to pay off debt more quickly. However; it would actually be a worse idea for most of us right now. Our home was worth almost $40,000 less than what it is now, only 3 years later. And the interest rate has more than doubled. Same for our car. So it isn’t worth it to downsize for us. With that being said, if you can downsize your home or car, even if the monthly payment is similar, you may be able to save on utilities or fuel and maintenance. You really would have to be smart and weigh on your options on this one.
Stop Using Your Credit Cards
Most people in credit card debt are not good with credit cards. Credit cards can be helpful for rewards or building credit, but if you can’t pay them off or on time, they’re not worth having. If you change your spending habits and become debt free and want to use a credit card for fuel only for the rewards points, that is one thing. Considering cutting them up, freezing them, or the very least, removing them from your wallet and online payment methods.
>> 10 Valuable Vintage Homemaking Skills That Save Money in 2025 <<
Switch to Cash Only
Cash only is a bit more difficult these days, but I’ve never been denied using it. In my mind, if they won’t allow me to use cash, I won’t bother with the purchase anyways. Cash is harder to leave our hands than swiping a card. It’s also easier to know exactly what we have.
>> Downloadable & Printable Cash Envelopes <<
Track Your Progress
Using a fun chart, creating a game, or simply just tracking it on your computer will help you see and know exactly where you’re at. It’s motivating and can actually be quite exciting.
>> Free Printables to Save You Time and Money <<
Focus on One Goal at a Time
You don’t want to necessarily pause investments, particularly retirement, but the sooner you pay off debt, the more quickly you can focus on your next goal. So, try to focus on one at a time.
Automate Your Payments
I rarely have late payments, but if I do, it’s usually because I simply forgot to pay it. By automating your payments, you avoid these unnecessary late fees, and potential interest fees as well.
See a Financial Advisor
If you’re in super deep, it may be the best idea to see a financial advisor. Especially if you really struggle in the area of finances. A lot of companies actually provide free advisor incentives to their employees. Even if it’s just a one time meeting, it can help a lot.
Debt Settlement
Sometimes, depending on the debt, you may just be able to settle it. Maybe you can reach an agreement where they get a certain amount. They’d rather have some than none. This can be particularly helpful when it comes to medical debt and bills. It’s something worth looking into.
Reduce Your Fixed Expenses
It’s easy to cut out things we don’t need, but what about the ones we must pay for, like food and utilities. These items can always be reduced, even if slightly.
>> Cheap Ways to Stay Warm without Turning on the Furnace <<
Celebrate Wins
We would have gotten no where if we didn’t celebrate along the way. If you cut out eating out to pay off debt, go out when you hit a certain amount. It doesn’t have to be total deprivation. It’s a sacrifice, but it doesn’t need to be that way forever.
Stay Consistent
You can’t go into a big goal and not be in it. You also can’t give up when something happens, because it will. That’s life! Keep with it, stay patient, and keep going. You didn’t get into all this debt in a matter of months, more than likely, and you won’t get out without consistency and hard work. You’ve got this!
