5 little-known techniques to get out of debt

Most debt-reduction advice boils down to “Pack your lunch and stop buying lattes every day.” Although this strategy can help, it probably won't move the needle as effectively, or as much, as you’d like.

Luckily, you aren’t limited to skipping your morning Starbucks. In this article, you’ll learn five little-known techniques to help you effectively eradicate debt.

The best part? These tactics can be combined with conventional strategies to amplify your debt-cutting approach.

After all, coffee isn’t getting any cheaper.

Round-up payments

One of the biggest challenges of reigning in debt is remaining consistently disciplined. Using a round-up method is one way to attack debt without thinking about it.

Many banks and financial platforms offer rounding-up services on debit and credit cards. When you make a purchase, the provider rounds payments up to the nearest dollar. The difference is set aside in a separate savings or investment account.

The primary benefit is that you don’t have to think about this additional savings regime. It just happens.

And this approach isn’t limited to small purchases at the grocery store. Writing for CNBC last year, Brett Holzhauer detailed how you can use this method to pay down debt, even a mortgage.

For example, if your mortgage payment is $2,340 monthly, consider increasing it to $2,400 or even $2,500.

Psychologically, the difference won’t feel like much. But month after month, that additional contribution will substantially impact your outstanding balance.

Balance transfer high interest credit cards

Psychological strategies are great, but they aren’t the only tools you have at your disposal.

If you have multiple high interest credit cards, consider transferring their balances to a card with a more favorable rate. Credit card issuers often offer 0% APR for the first 12 months to entice new customers.

With a 0% APR, every dime you pay against your balance for the first year will go entirely to the principal. This means it's an opportune time to tackle credit card debt.

Lana, a project manager from Denver, successfully transferred her growing credit card balance to one with a lower rate. This helped her obliterate a more than $16,000 balance in less than a year.

Before jumping on any attractive credit card promotions, though, make sure the APR following the introductory period isn’t unusually high. Even better, ensure that you can pay off the balance within the introductory period.

Even if you can't, ideally the new rate after 12 months will still be lower than the average of the previous, existing cards.

You should also be conscious of any fees. Balance transfer fees can range from 3% to 5%. It’s critical to account for the entire cost before deciding to proceed.

Debt snowball method

The debt snowball method is another strategy that accounts for human behavior and psychology. This method accepts the reality that humans thrive off momentum. As a result, it’s a method that attempts to provide as much progress as quickly as possible.

The method involves prioritizing your lowest balances. That is, you rank your debts from smallest to largest and pay the lowest one off before moving on to the next.

To implement this strategy, allocate as much cash as you can toward your lowest balance. For all other debts you owe, only make minimum payments.

This approach is effective and popular because it allows debtors to watch their obligations clear as quickly as possible. It intensifies enthusiasm, making you want to tackle the remaining debts even more.

And that’s not all. Each debt you clear gives you even more dry powder to apply to the subsequent obligations. In other words, debt reduction accelerates and makes the process easier to follow as time passes.

Want proof? Brian and Linsey crushed $130,000 of student loan debt in just four years using this method.

Join a Buy Nothing group

Technological innovations have brought about countless improvements in the standard of living. One such improvement is the ability for people to connect quickly and easily.

Finding used items free and fast would have been impossible in the past. That changed with the explosion in popularity of “Buy Nothing” groups.

Need a new stroller? Instead of dishing out $300 at the store, check your local Buy Nothing group for options. Chances are someone nearby has a suitable one you can have for free.

By leveraging Buy Nothing groups, you can save a lot of money. This money, like the $300 stroller savings, can be allocated toward paying down debt.

Not only that, according to the Credit Counselling Society, the Buy Nothing movement’s focus on intentional spending can help reduce future impulse purchases.

And if that isn't enough, you help keep items out of the landfill and interact more with your neighbors.

It’s a win-win-win.

Needless to say, your parents would have loved to have something as helpful as a Buy Nothing group when they were younger and just starting out.

Sell unwanted possessions

According to Adam Baker of the popular blog Man vs Debt, you should “Sell your crap. Pay your debt. Do what you love.”

It’s good advice, especially since the average U.S. household has 300,000 “things,” according to the Los Angeles Times.

And while you may not want to hear this, you probably have too much stuff. Likely, this stuff helped put you in debt.

Thankfully, and ironically, these possessions will also be part of the solution to resolving your debt.

Many of your 300,000 possessions can probably be sold to generate extra cash each month. Think old clothes, unused appliances, or electronics.

If you want to send your debt reduction protocol into overdrive, list used items on websites like eBay. You’ll be amazed at how much you can earn selling your old possessions.

There are numerous benefits to this technique:

• All the revenue you earn is over and above your regular income
• You declutter your home in the process
• You can reduce the need for costly storage solutions. Today, one out of every 11 Americans drops an average of over $90 per month on self-storage.

While it may seem daunting at first, it gets better. Like the debt snowball method, the more you do, the easier it gets.

With possessions, try focusing on turning over the big rocks. Focus on selling your most valuable items first.

Use the proceeds to chip away at your debt and declutter your life. Watch as the process not only gets easier, but more enjoyable. Even fun.

Let’s be honest: you were never going to use that treadmill in the first place. Take the cash and move on.