Net Worth / Debt

3 Best Ways To Quickly Reduce Your Debt

June 23, 2024

2 min Read

Written by Adam Palasciano

Edited by Cory Dudak

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Liubomyr Vorona / iStock.com

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In most cases, debt isn’t good. It eats a hole in your wallet and creates a continuous drain on your finances. The bad news is that U.S. household debt has never been higher.

The Federal Reserve Bank of New York’s Center for Microeconomic Data recently reported that U.S. household debt has climbed to $17.69 trillion as of Q1 2024 and delinquency rates are once again on the rise. 

If you find yourself in debt, don’t fret too much. There are several easy ways to get out of or at least reduce the debt you owe fast.

Here are three great ways to quickly reduce your debt, according to Dave Ramsey:

Take Advantage of Debt Relief

By taking advantage of debt relief services, you can more easily pay off your high-interest debts in a reasonable amount of time. Debt relief companies offer products such as debt consolidation loans, debt management programs, and debt settlement and negotiation services.

Reduce Interest Payments

Finding effective ways to reduce your interest payments will not only save you money but can help you get out of debt faster by putting more money toward your principal. For example, if you have a high credit card balance, consider taking advantage of a balance transfer credit card that offers a 0% introductory interest period. Alternatively, consider consolidating your debt into a lower-interest loan to save you from going further into debt. You can focus on paying down your higher-interest debts first and then move on to other debts or, as Dave Ramsey suggests, focus on the debts with the smallest balances to get those paid off quickly.

Get a Side Hustle to Earn Extra Income

Taking on extra work outside your 9-to-5 job is a smart way to help pay down your debt faster and more aggressively. Some popular side gigs include becoming a rideshare driver, babysitting, dog walking, and freelancing. Consider choosing a side gig that aligns well with your existing skills and passions.

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