We all fantasize about brighter financial futures. Some people picture winning the lottery—imagining how they’d spend such a giant windfall. But others simply think about what they’d give to get out of debt on the spot, akin to getting a “get out of jail free” card in Monopoly.
It makes sense so many Americans would be willing to bargain to get out of debt. It’s stressful to know you owe money while remaining unsure of when you’ll be able to feasibly pay it back. It’s certainly no fun watching interest accumulate; nor is it pleasant to see your credit score drop if unpaid debts go to collections.
Here’s more on what Americans would give in exchange for wiping out their debts, plus strategies to consider for realistically working down your debt over time.
What Would You Give to Get Out of Debt?
If someone asked what you’re willing to sacrifice in order to get out of debt, do you have an easy answer ready to go? As The Motley Fool recaps, one survey from debt settlement leader Freedom Debt Relief did ask 2,000 Americans this question, albeit in multiple-choice form. Respondents could only choose one answer.
Here are the results:
- 22 percent of respondents would give up going out to eat.
- 21 percent of respondents would give up vacations for 10 years.
- 13 percent would sacrifice the right to vote.
- Only 6 percent would give up their phone; 5 percent would forgo the internet.
- About one-third of respondents were unwilling to give up any of these.
Of course, some of these answers are more realistic than others. For instance, it may be hard or impossible for some people to give up their smartphones if they need them for work. But cutting out visits to restaurants or foregoing traveling for pleasure are more feasible because there are plenty of lower-cost alternatives for people to enjoy, like cooking at home and enjoying affordable activities in your area.
Real-World Strategies for Eliminating Debt
The truth is that getting out of debt does require sacrifice—most consumers end up having to tighten their budgets, increase their income or a combination of both. Depending on the amount of debt you’re carrying, you may have to sacrifice for months or years to eliminate your debt once and for all. Is it worth it? Yes, but there’s no denying it will require a healthy dose of willpower and struggle along the way.
The foundation of any plan to get out of debt is reducing expenditures. There’s no way to get around doing the work of tallying up what you earn vs. what you spend. NerdWallet recommends keeping to a basic 50/30/20 budget, meaning half your income goes to essentials, 30 percent goes toward wants, and at least 20 percent goes toward saving and debt repayment. Obviously tweaking these percentages to favor debt repayment will help you achieve debt freedom faster, but it’s a helpful guideline to consider. To make budgeting easier on yourself, automate whatever you can. Using an app can help you set up deposits and stay current on spending, too.
If you need help getting a grip on your debt, consider working with a credit counselor to come up with a debt management plan. You’ll still be on the hook for paying your debt in full, but the payments are simplified, and you may even get a better interest rate.
Consolidation is another tactic to consider, in which you take out a loan to cover your most pressing debts, then repay that loan steadily over time.
Debt settlement is another option for consumers with serious debt; it requires consumers to save up money over the course of months or years until they’ve amassed enough to negotiate with creditors. The end goal is to actually reduce how much you owe.
The most drastic option is bankruptcy, but this process will stay on your credit report the longest and may even require you to liquidate some of your assets.
What are you willing to sacrifice to escape debt? It won’t happen overnight, but with a plan in place—and a determined mindset—you can certainly chip away at your debt until it’s gone.