Ways to Pay off Debt that Actually Work

Paying off debt is a struggle that many of us has to go through in our lives. Whether you have credit card debt, student loans, or mortgages, we are all in this together. Below are six ways to pay off debt that actually work. They are not too difficult to implement and they can really provide some significant savings. Let’s begin!

Save on housing expenses

I have to be honest here. This strategy requires some sacrifice, but it is still the #1 on my list because it is also the most effective. You can see the dramatic improvement in your cash flow after you implement it.

There are different approaches to saving on housing expenses. For example, instead of living 10 minutes away from your downtown workplace in a one-bedroom apartment, you may consider downsizing to a bachelor’s apartment. You may also move a bit further out of the downtown core, and rent a place in the suburbs, though you may have to sacrifice some time in commuting. Of course, if your parents still live in the same city, you may want to continue living with them to save on housing costs.

Side-hustle to supplement your income

If you have any debt that you are dying to pay off, you may consider supplementing your income with some side hustles. For example, you can babysit your neighbours’ kids on weekends, become a pet sitter with Rover, work in a restaurant or a bar, join Door Dash as a driver, or complete surveys that pay cash instantly.

You may get additional benefits on top of the regular wage at these side hustles as well. For example, when I was working in a dining hall, the place actually offered me free dinner, so I saved on groceries there as well.

If you don’t enjoy your side hustles, please keep in mind that this is just temporary. Once you finish paying off your debt, you will be free to leave (of course, unless you incur more debt, which is a NO NO).

Check out my blog post to see how you can make money online as a beginner!

Save on entertainment by finding low-cost activities

There are lot of ways you can entertain yourself and your friends for a very low cost, or even free. Check out your local websites. They typically have those “what to do on the weekend” articles that introduce various events to the locals, and many of them are free. If your apartment building offers free amenities for residents, such as a karaoke room, you may want to leverage them as well to introduce a bit of variety when you hang out with your friends. At the end of the day, it is not usually what you do that matter. It is more often WHO you do things with that matters the most.

Asking for gift cards at stores you regularly shop at for your birthday and Christmas

Do your close family members sometimes find it difficult to find gifts you like? Well, how about asking them for gift cards? This can easily kill two birds in one stone. They can give you a gift that you want (what a relief), and you can use these gift cards to help with your debt repayment. For example, instead of using cash to pay for your grocery, you can use the gift cards your parents give you for Christmas, and re-direct the original grocery budget to pay down your debt.

One caveat is that in order for this strategy to be effective, you need to make sure that the gift cards are for stores you frequent for necessities, and you are only using them to REPLACE what you would be buying anyway with cash. Good candidates for gift cards would be grocery stores, coffee chains if you really do drink coffee on a regular basis, and clothing and makeup stores that you go often.

Additionally, your attitude towards these gift cards is really important. You should use these gift cards the way you would spend your actual money. This means that you shouldn’t all of a sudden buy things that are more aspirational than necessary. For example, if you normally buy regular cheese, you shouldn’t replace all of your regular cheese with exotic ones. Obviously, a bit of a splurge on high-end cheese is okay, but you shouldn’t let your grocery bills double. If you normally buy $20 face wash, you should refrain from buying a $50 face wash with the gift card. Unless, of course, you are willing to spend your own money purchasing that $50 one.

Sell items online (e.g., Kijiji & Craigslist)

Selling used (or even unused) items online can be a fabulous way to earn a bit of extra money to help pay down your debt. Basically almost everything you can think of can be sold for money online, as long as the items are still in reasonable conditions. Over the years, I have sold books, toys, bookshelves, my old computer, you name it.

There are many benefits of selling items online:

  • You get rid of items you don’t need
  • You make some money off things you would have thrown away
  • The buyer can get something that is valuable to them for a much cheaper price
  • Both of you help save the environment, because there isn’t an extra unit of product produced.

I guess the only party unhappy about the online exchange would be the manufacturer. Oh well.

Exchange items with others

Exchanging items with others is both fun and free. You can do it either with your friends or your local community, or you can join an online network and exchange with strangers.

An in-person session is really fun. My girlfriends and I have done a few clothing exchanges. Every time I was able to find a few pieces I liked while sharing plenty of laughter with my friends. It was basically a regular social gathering with everybody walking away with something useful for her personal use, for free! Try this with your friends too, and see how it turns out. Of course, you don’t need to limit yourself to just clothing.

Keep your eye out on your local events page or your local community’s announcement page. There are more and more green organizations that are facilitating such an exchange as well.

If physically walking into a large gathering with no guarantee of finding something is too much for you, then you may consider joining an online exchange network. The ones I have used include Freecycle and Bunz. I have met some wonderful people through these platforms while saving plenty of money. What to do with the money saved? Well, you can put it towards your debt!

Try implementing a cash diet

An all-cash diet can also help you pay off debt. It works by forcing you to stick to your budget, because you can only spend cash on all your purchases.

If you’d like to learn more about this approach, check out my complete how-to guide on cash diet!

Final words

The above are some of the unique ways to pay off debt. I hope they help you in your journey towards being debt-free. No matter where you are, each baby step is a win. Let me know in the comments below if you have any other great ways to pay off debt!

For more money saving tips & tricks, check out my articles here!


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