1. Always pay more than you have to

Make sure that you always pay more than your minimum payments. If you only make your minimum credit card payments each month, it can take forever to pay off your balance. If you want to pay off your balance quickly, pay as much extra as you can afford. Even an extra $50 each month will help.

2. Always spend less than you want to

Most of us have wishes and wants that are bigger than our pay cheques. You might have heard the great saying that, “You can have almost anything you want; you just can’t afford everything you want.” Many people get into debt and stay in debt because they tend to buy what they want, when they want. Not even millionaires can afford to buy everything they want. If you want something, don’t buy it unless you have the money. If you can be satisfied with less than you would ideally want, even temporarily, you can use the money you save to pay down your debt. By the time your debt is paid off, you’ll probably have adjusted to your new priorities, and you can use the money that you are saving to put toward other financial priorities. You can choose how far you want to go with this.

3. Pay off your most expensive debts first

One of the smartest strategies for getting out of debt is to make minimum payments on all of your debts and credit cards except for one. Chose the one debt that is charging you the most interest and focus all of your extra payments on paying that one off first.

Once your first, most expensive debt is paid off, take all of that money that you were paying on that first debt and focus it on the next most expensive debt. Continue this method as you pay down each of your debts, and you will be left with your least expensive debt to pay down last: this is usually your mortgage or car loan. This strategy will get you out of debt quickly, and you will feel encouraged as you see your progress.

4. Buy a quality used car rather than new one

Dave Ramsey, a personal finance radio host, once said that, “A new $28,000 car will lose about $17,000 of value in the first four years you own it. To get the same result, you could toss a $100 bill out the car window once a week.” You can save yourself thousands of dollars if you buy a quality used car rather than a new one. The money you save can help you get out of debt much faster. Go to your local library and look in the Consumer Reports or Phil Edmonston’s Lemon-Aid books to find a quality used vehicle.

If you choose to buy a new car, in the past Consumer Reports has recommended choosing a reliable car with good fuel economy, and then they suggest you keep it for 15 years. This will stretch your dollars the furthest and keep you out of debt as you will have plenty of time to save for another new car.

5. Consider getting rid of one car

If your family has two cars, consider getting rid of one and either walking to work, taking transit or car pooling. You can save yourself thousands of dollars a year by only using one car. If you use this money to pay down your debt, it will make a big difference. Instead of going cold turkey and selling your second car right away, test drive this idea first. Try parking your car for a while, dropping the insurance down to pleasure use only and see if taking transit, walking, cycling or car pooling works for you. If you do decide to sell your second car, even the odd taxi trip or rental car won’t amount to nearly as much as you would spend on keeping your second vehicle permanently.

6. Stockpile groceries

To save money, try stocking up on groceries when they are on sale, or go one step further and stockpile when they are on sale and then skip one grocery shop every month and live off of the food you stockpiled. You can stockpile non-perishable groceries like canned goods, cereal and things that you can freeze like bread and meat. Filling your cupboards when groceries are on sale and then skipping one grocery shop each month can save you up to 25% on your annual grocery bill. A family of four could save $2,300 to $2,900 a year by doing this. Applying these kinds of savings to your debts, will definitely put you ahead in the long run!

The key to this strategy is watching for sales, only stocking up when groceries are on sale and freezing foods properly. When you “skip” a grocery shop you will still need to buy perishable groceries like milk, fruit and vegetables, but hopefully you can skip the rest of what you would normally buy. If you can’t skip a shop once a month, then try for once every other month. That will still save you a good amount of money.

7. Get a second job and pay down your debt aggressively

Getting a second job, or consistently picking up an extra shift or two, is a common way for many people to pay down their debt. This doesn’t work for everyone, but if you can make it work, you could be debt free within a short number of years. For this to work, you must apply all of your extra income to debt repayment.

8. Track your spending and identify areas you can cut back

For some people, doing this can save them almost as much money as working a part time job. You won’t know how much you can save unless you give this a try. Track what you actually spend—not what you think you should be spending, over the course of a month. If you aren’t honest with yourself in this exercise, it won’t work, but most people are surprised by what they find out about their spending. Once you have tracked your spending, you should be able to identify areas where you can cut back. Allocate the money you “find” to paying down your debts.

9. Get a consolidation loan

See if your bank or credit union can help you consolidate all of your consumer debts into one loan with one payment at a lower interest rate. This can be a helpful first step in getting your debt paid off. However, getting a debt consolidation loan will only help you if you create a budget that allows you to save some money every month. Savings isn’t usually what someone in debt thinks of first, but if you don’t have savings, you will likely need to reapply for credit cards part way through your loan and then rack up more debt.

10. Add your debt to your mortgage

If you own your own home, you may have enough equity to consolidate all of your debts into your mortgage. If you don’t have much equity in your home, additional mortgage insurance costs may be expensive. Make sure you consider all of your options and seek advice from someone other than your lender (since they have a vested interest in getting you to choose this option).

Just like with a debt consolidation loan, when you consolidate debts into your mortgage you also need to create a budget that allocates money to savings. If you don’t, you’ll always be tempted to borrow more when “emergencies” arise. Repeatedly using your home as an ATM can set you up to face retirement with a lot of debt, no assets and no savings. If this is something you’re struggling with, read on.

11. Speak with a Credit Counsellor

If you are in debt and think that bankruptcy might be your only solution, start by speaking with a Credit Counsellor. Find out what programs are available to help you deal with your debts. A reputable Credit Counsellor will explain all of your options and let you choose the option that makes the most sense for you in your situation. Many people don’t know what they need to know about debt repayment programs at non-profit credit counselling organizations but most are relieved they took the time to find out before it was too late.

12. Create a spending plan

Ok, so the “b” word has to fit in at some point. In truth, a spending plan is a budget. It will help you stay on the straight and narrow with your current debt payments, or your new accelerated payments. A spending plan makes sure that you are spending less than you earn.

Some people say that they don’t like budgets, but have these people ever tried one? Better yet, if you’ve lived all this time without a budget, how do you know you won’t like having one? After trying a realistic budget on for size, most people agree that the alternative—being in debt—is much worse. To learn how to create a budget, click here.