Top 4 Tips for Getting Out of Debt in 2019

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As we round the corner in 2019, it’s worth taking another glance at the state of personal finance and debt. This year, perhaps more so that others, the conversation around debt has zeroed in on student loans and the burden they have become.

While the promise of higher qualification leading to a higher salary can be feasibly linked, the discourse around student debt is one that has gained more traction since skyrocketing to record highs. The United States is home to over 44 million borrowers who have racked up over $1.5 trillion of student loan debt. The average borrower is $37,000 in debt.

Whether you’re still working toward earning your degree or have recently entered the job market, rescuing yourself from debt before interest piles on is at the top of your priority list. And it should be. Debt is one of those things that grows into a scarier monster the longer you let it fester, so make this year about getting out of debt for a financially emancipated future.

So, whether it’s debt from college that you’re still paying off or some other loan you’ve had to take on previously, these tips will get you on the right track to financial freedom.

• Budget smarter, not more

It’s easy to get into the habit of being haphazard with your spending. Some weeks may be tighter than others depending on what bills are due and when your gas tank needs filling. Instead of guessing and skirting about nailing down a set-in-stone budget, take the time to evaluate your monthly outgoing costs like rent, utilities, groceries, and other bills, and compare it against your monthly income. Make sure you set enough aside to pay off your bills and set aside a decent portion of the remainder toward debt repayment. Using personal finance apps like Pluto or budgeting apps like PocketGuard will make your spending much easier to track.

Your level of lifestyle is highly dependent on the amount of disposable income you have, and while you may have hundreds to spare, putting it toward your debt will have better long-term results than blowing it all each month on dinners out and shopping sprees.

• Research payment plans

When loan repayment bills start coming in, you may find that they outweigh the cost of your normal bills. This is all dependent on how much you owe and the terms of your individual loan provider. If you’re unable to manage the amounts due each month, look into adjusting your payment plan. Income-driven repayment plans work around your annual salary, while graduated repayment plans start low and gradually increase as your career progresses. Finding a better-suited repayment plan can allow you to live comfortably, put money away into savings and start chipping away at the debt.

If you’re being bogged down by federal tax debts, that may be a different story. Instead of student loan providers breathing down your neck, the infinitely more intimidating IRS will be. Fortunately, IRS payment plans exist. If you’re unable to make an IRS tax payment, there are a number of consequences that are far more serious than a simple late fee. A Federal Tax Levy allows the government to seize your property, garnish wages, and sell your possessions. To protect yourself against the IRS wrath, seeking an IRS repayment plan is your best bet to getting out of federal tax debt.

• Pursue a side hustle

Whether you’re stuck in a 9-5 hustle or are busy keeping up with classes, pursuing a side hustle could be your answer to prayers for a little extra cash in your pocket. Taking up a part-time job at a local cafe or bookstore may be the perfect low-maintenance job for you, or maybe your passion for blogging turns into a freelance writing side career. Keep your talents and interests in mind when looking for a suitable side hustle—the last thing you want to do is take on a job that you absolutely dread. Put all the income earned from your side hustle toward your debt repayment and you’ll be free faster than ever.

• Live more frugally

Instead of simply skipping the guac at Chipotle, skip Chipotle all together and opt for a homemade meal to save on outgoing costs. Living frugally can mean a lot of different things depending on your lifestyle, but consider these frugal living tips:

1. Cut down on your TV or cell phone plans
2. Stop clothes shopping
3. Ditch your gym membership
4. Ignore impulse buys
5. Brown bag it to work
6. Ditch expensive hobbies
7. Carpool to work
8. Sell your unused or excess clothing tech
9. Cancel useless subscriptions
10. Plan your grocery trips

Make 2019 your year of getting out of debt. You’ll be grateful for all of your hard work in 2020 when you ring in the new year without thousands of dollars keeping you bogged in the past.