Strategies to Get Out of Debt and Save More Money in 2024


Americans, on average, owe $59,580 in debt across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts.

If you’re in the red and hoping to chip away in 2024, it’s possible to pay down debt without feeling completely cash-strapped.

But don’t take our word for it: Business Insider has spoken with couples and individuals who have tackled their debt while still feeling like they can live their lives. All of their debt payoff claims have been verified

Here are their top strategies.

1. Create a budget that still allows room for discretionary spending

Budgeting can get a bad rap, but you can build discretionary spending into your budget and transform it from something often labeled as “limiting” into something liberating.

A budget is essentially a plan for your money and, as long as you’re covering your fixed costs and contributing enough to your debt and other savings goals each month, you can choose how to spend any excess money.

When Alexis and Neiko Johnson set off to pay down their $460,000 worth of student loans, they downloaded Dave Ramsey’s budgeting app EveryDollar to track their income, debt, and expenses. While they were mindful of their spending habits, they didn’t completely deprive themselves.

“Some months we would get dinner or buy a pair of jeans, but it would be like $100 a month,” said Nikko. “That kept us motivated. We were still living life and staying focused at the same time.” Fewer splurges meant more appreciation for when they did spend their money, he added: “When we went out to eat for $50 it felt like a $500 dinner.”

Another couple, Brennan and Erin Schlagbaum, created their own budget using an Excel spreadsheet to tackle their six-figure debt.

brennan erin Schlagbaum

Brennan and Erin Schlagbaum.

Courtesy of Brennan and Erin Schlagbaum



Their strategy was to pay the monthly minimum on each of their debts except the one they were focused on eliminating at the time — for that one, they set a specific minimum dollar amount they had to put toward it each month. They treated it like any other fixed cost, like insurance or internet.

What tended to happen was they would find extra money to throw at the debt, pay more than the minimum they set each month, and hit the goal earlier.

Setting a minimum gave them flexibility within their budget for discretionary spending. “We were still living life,” said Brennan. “If we wanted to get a massage one month, we didn’t skip that stuff. But at the same time, we were very set on our goals, so when we had extra money, it went to our debt.”

2. Use the ‘aligned money method’: Spend in alignment with your values and cut back everywhere else

Laurie-Anne King, who paid off $45,000 in student loans and credit card debt, now helps thousands of other women tackle their debt through Dow Janes, a financial education platform that she co-founded with her friend Britt Baker.

The crux of the debt-payoff strategy she and Baker teach in their financial literacy course is what they call the “aligned money method.”

Rather than focusing on cutting back and sacrificing certain things in order to become debt-free, this approach is centered on spending money that aligns with your values. In order to do that, you first have to understand what’s important to you. Maybe it’s gaining new experiences by traveling; it could be buying healthy foods or spending money on a gym membership.

dow janes co-founders

Laurie-Anne King (L) and Brit Baker (R), co-founders of Dow Janes.

Courtesy of Elaine Drabik



Once you’ve thought about what you truly value, spend your money (within reason) in those areas and cut back everywhere else.

That way, “you’ll be focused on spending better instead of just spending less,” said King.

When their clients start doing this, King and Baker have found that “people end up saving way more money than they were saving before, while also doing things they didn’t think they could do before.”

Plus, it’ll be much easier to stick with your budget if you give yourself room to spend some of your hard-earned money.

3. Focus on cutting major expenses, like housing and transportation

Ali and Josh Lupo paid off $102,000 worth of debt on social worker salaries. They did it by not only creating additional income streams, but also by focusing on keeping their three main expenses ​​— housing, transportation, and food — in check.

“We’re conditioned to cut out the smallest expenses, like Netflix or coffee or dining out,” said Josh. But that’s not always the most effective way to save: “If you learn how to master those big expenses, it will free up a ton of money so you don’t have to stress about the small stuff.”

Trimming the major expenses might require upfront sacrifice — maybe you downgrade your car, or move in with roommates to save on housing — but it’ll pay off in the long run and allow you to spend guilt-free on things like your morning coffee or going to the movies.

Think about it this way: If you’re spending $2,000 a month on rent and find a way to cut that in half by moving in with roommates, that’s $1,000 extra in your pocket each month. If, instead, you stop going out to dinner with your friends to save $30 a week, that’s $120 in savings over a month.

Focus on the big expenses. You’ll not only boost your savings significantly and get out of debt quicker, but you’ll stress less about your day-to-day spending.

4. Get organized and take ownership of your debt

Ian Group ignored his six-figure student debt for a while. He did two loan forbearances, which is when you temporarily stop making payments, before deciding to tackle his loans head-on.

“I didn’t get into, ‘I’m going to solve this mode,'” he said, adding that, if he could do it all over, “I would get very logical and put everything into a spreadsheet and figure it all out.” After all, his principal balance grew from $190,000 to $210,000 after his two forbearance periods.

His top advice to anyone struggling with debt is to get organized: understand exactly how much you owe, what your interest rates are, and how long you’ll be making payments. Then, look into refinancing.

Group had 12 different student loans, all with varying interest rates (between 5% and 8%) and payoff dates. He spent a lot of time researching banks before he found a private one that was doing student-loan refinancing. He was able to refinance them all at a 6% interest rate.

He treated the refinancing process like a game, he said: “I had fun figuring it out. I realized that if I can do this one time, I can keep doing it. So I did, and it kept bettering and bettering my situation.”

He ended up refinancing three more times and got his rate all the way down to 2.35%, he said, which has helped him pay off nearly $200,000 while simultaneously chipping away at other big savings goals like buying a home and saving for his kids’ future education costs. It all started with facing his loans head-on, something he wished he’d done sooner.

“Have the confidence to do it now,” he advised, “because your life is going to be a lot easier if you do.”

5. Build another income stream

When Tiffany Aliche found herself in $35,000 worth of credit card debt and out of a job during the Great Recession, one of her initial steps was thinking about how to earn more money. She recognized that being a conscious spender could only get her so far.

Finding a traditional, 9-to-5 job during the recession was difficult, so she picked up side gigs like babysitting and tutoring. She also started working on what has evolved into The Budgetnista, her now seven-figure financial education company.

“Honestly, entrepreneurship wasn’t the plan at all,” she said. “It’s just that I could not find a job during the recession.”

tiffany aliche

Tiffany Aliche, founder of “The Budgetnista.”

Courtesy of Tiffany Aliche



Six years after losing her teaching job, however, “my business had done well enough that I had enough money to write a full check of what was left over from my student loans,” she said. “It was $30,000 to $40,000 left over and I just wrote a check and I paid it off.”

Building a successful, income-generating business helped her pay down her student loans without having to sacrifice in the way that she did while paying down her credit card debt, she said: “That was an ‘aha moment.’ Do you spend the six years never going out and never having any fun to pay down this debt or do you spend the six years figuring out how to make enough to cover the debt and life?”

She chose the latter: “I spent the six years on my business and learning to make enough. My student loans were gone and I actually had a life and money outside of paying off that debt. It was such a huge lesson: Debt freedom is a goal, but debt freedom is not the goal. The goal should be growing wealth because wealth takes care of debt freedom and everything else too.”

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