Editorial Policy

5 extreme ways to cut debt quickly

Matt Alderton

December 10, 2014

Eliminating debt takes persistence, patience, discipline and dedication. Eliminating it quickly, however, takes a fifth, secret ingredient, according to Washington, D.C., resident Stephanie Benedetti. That's creativity.

By the time she finished college and grad school in 2007, Benedetti had accumulated $90,000 in student loan and credit card debt. “Five different companies owned my debt, so understanding how much I really owed was confusing,” says Benedetti, who had an “aha” moment when she met her husband, Rob. “Rob is a mathematician. He's really good at numbers, so he was really quick to point out, 'You realize you owe this much debt, right, and that you're going to be paying it off until you're 45?' I had sticker shock, and that really woke me up to the lifestyle changes I needed to make.”

Instead of 20 years, Benedetti endeavored to pay down her debt in three. “I started tracking every dollar I spent,” Benedetti continues. “Then I created goals and began looking at each line item on my budget to find opportunities.”

Opportunities manifested in the form of reduced spending as well as extra income, not only for Benedetti, but also for others like her, such as former debtors Deacon Hayes of Phoenix and Jackie Ritz of Asheville, N.C. Here are five unique strategies that worked for them — and could work for you:

1. Shave your spending

Because housing was one of their biggest expenses, Benedetti and her now-husband moved in together; for more than a year they lived in a studio apartment in order to consolidate bills and minimize rent. Benedetti also canceled her gym membership; got rid of cable, choosing instead to stream shows on her computer; and downgraded her cellphone data plan, using Wi-Fi for Internet connectivity whenever possible.

“I didn't realize how much money was going toward minor things,” Benedetti says. “It added up to thousands of dollars per year.”

2. Sell your stuff

When they got married in 2008, Hayes and his wife, Kim, had two condos, a brand-new car and a camera full of happy honeymoon photos. When they sat down to plan their wedded life together, however, they realized they also had $52,000 in combined debt.

“We got married in our mid-20s and realized we were already in the negative,” says Hayes, who subsequently set a goal to eliminate their debt in 18 months. “We were not starting out on a good foot.”

“Now that I'm debt-free, I understand a lot better where my money is going — although I don't have to be as much of a stickler about spending it.”
–Stephanie Benedetti

Like Benedetti, Hayes cut expenses. That wasn't enough, however. “You can only reduce your expenses so far,” he says. “Like most people, I had a lot of extra time I wasted; if I wanted to get out of debt, I knew I had to use that extra time to make more money.”

Step one in increasing his income was selling his stuff on eBay. “We had things sitting in closets, on bookshelves and in storage that we could get rid of,” Hayes says. “Stuff like old textbooks. Or even old cellphones — there are people still using those who will pay $30 or $50 for them. It's not much, but it adds up.”

Hayes sold other people's things when he ran out of his own. “I went to yard sales and did arbitrage,” he continues. “I used the Amazon app on my phone to scan items, like electronics, to see what they were selling for online. I still do this. Last weekend I found a P90X exercise program for $5 that I can sell used on Amazon for $130.”

3. Get an (odd) job

Both Hayes and Benedetti supplemented their income with second jobs and miscellaneous gigs. Hayes, for instance, got a part-time job delivering pizzas. Benedetti made a habit of browsing opportunities on Craigslist. She participated in focus groups, for example, and mock juries, became a mystery shopper, staffed events at the convention center and even started babysitting.

“My goal was to make $1,200 extra a month to apply toward my debt, and most months I did it,” Benedetti says.

4. Eat smart

In 2013, Ritz and her husband had more than $50,000 in debt. Within six months they had paid over half of it off by reducing expenses. Cable and cellphone bills were easy targets. Ritz, however, spent most of her money on groceries and eating out. One of her most successful strategies was meal planning.

“It was really hard to do, but with meal planning I was able to source the cheapest produce and meat,” Ritz says. “We shopped at the farmers' market and bought things in bulk — a half cow, for instance, or whole chickens instead of chicken breasts and thighs — whenever we could. We kept our grocery budget to $200 a week for a family of four, and that saved us a ton of money.”

5. Make new friends

When your friends love spending money, it can be difficult to save it. Social strategies are critical, according to Benedetti, who expanded her social circle to include more friends who enjoyed doing free or low-cost activities, such as hiking trips instead of happy hours.

“I became a Meetup fanatic,” concludes Benedetti, who has relaxed her purse strings since eliminating her debt, but continues to save and spend responsibly. “Now that I'm debt-free, I understand a lot better where my money is going — although I don't have to be as much of a stickler about spending it.”