How to get out of debt: fresh strategies for long-term financial freedom

Lower your payments by talking to creditors

Sometimes, simply asking for better terms can be the most effective way to tackle debt. Creditors are often willing to negotiate with customers who show a genuine intention to repay what they owe.

This proactive step can sometimes lead to reduced interest rates, extended repayment terms or even partial forgiveness of debt in some cases.

Some simple negotiation tips include:

• Requesting a lower interest rate: Call your creditor and explain your situation. Many credit card companies have hardship programs to assist borrowers.
• Setting up a payment plan: If you’re behind on payments, work with your lender to create a structured repayment plan that fits your budget.
• Exploring debt settlement: This option, often used for large balances, involves offering a lump sum to settle the debt for less than the full amount owed. Be cautious of the impact this may have on your credit score.

Taking the initiative to negotiate shows creditors that you’re committed to resolving your debt, often making them more willing to work with you.

Consider counseling or debt management plans

For those who feel overwhelmed by debt, working with a certified credit counselor can provide clarity and direction.

Credit counseling agencies offer valuable resources to help you evaluate your financial situation, create a budget and develop a repayment plan tailored to your needs.

A Debt Management Plan (DMP) is a structured program where counselors negotiate with creditors on your behalf. These plans consolidate multiple debts into a single monthly payment, often with reduced interest rates or waived fees. While DMPs require commitment and can take several years to complete, they offer a reliable path toward becoming debt-free without resorting to bankruptcy.

By combining professional guidance with a structured plan, you can regain control of your finances and stay on track toward achieving financial freedom.

Simplify debt repayment using balance transfers

If you’re grappling with high-interest credit card debt, balance transfer cards can be a game-changer. A balance transfer card allow you to move existing balances to a new card with a 0% introductory APR for a set period, usually 12–18 months. This provides a window of opportunity to pay down debt without accruing additional interest.

To make the most of this strategy:

• Focus on an aggressive repayment schedule during the 0% APR period.
• Be aware of transfer fees and calculate whether the savings outweigh the costs of transferring your existing debt.
• Avoid making new purchases on the balance transfer card, as this can throw off your progress of paying down your overall debt.

Using balance transfer cards can be a practical way to reduce high-interest credit card debt and simplify your repayment process. By transferring your balances to a card with a 0% introductory APR, you give yourself a valuable window to focus on paying down the principal without the pressure of accruing additional interest.

However, success with this strategy requires discipline—ensuring that you avoid new purchases on the card and stick to a repayment plan that clears as much of the balance as possible before the promotional period ends.

For those who prioritize strategic planning, balance transfers offer a streamlined, cost-effective method to take control of your debt. With proper budgeting and consistent payments, this tool can accelerate your progress toward a debt-free future while saving you significant money on interest.

If you're considering this option, consult a financial advisor or carefully compare cards to ensure you choose one that best fits your needs.

Maximize every dollar with a zero-sum budget

A zero-sum budget is a highly effective strategy for taking full control of your finances. This budgeting method ensures that every dollar of your income is assigned a purpose, eliminating wasteful spending and directing more resources toward debt repayment.

Unlike traditional budgeting, which may leave funds unallocated, a zero-sum budget demands a proactive approach to managing every penny you earn.

To implement a zero-sum budget, start by calculating your total monthly income. Next, list all your expenses, including housing, utilities, groceries and discretionary spending, alongside your debt payments.

The goal is to assign every dollar to a category, leaving your income minus expenses equal to zero. This doesn’t mean you spend everything—it means every dollar is accounted for, whether it’s going toward bills, savings or debt.

For example, if you receive a $3,000 paycheck, you might allocate $1,500 to essential living expenses, $500 to savings, and $1,000 to paying down debt. By directing unallocated funds toward debt repayment, you can expedite your journey to financial freedom while building better money habits.

Over time, a zero-sum budget can help you develop greater financial discipline and awareness, ensuring that no income is left to chance or unproductive spending. As a bonus, this method encourages thoughtful prioritization, giving you a clearer path toward achieving your financial goals.

Utilize community and financial resources

If your debt feels overwhelming, don’t hesitate to explore the resources available in your community or through financial assistance programs. Many nonprofit organizations, local government agencies, and online platforms offer tools and services designed to help individuals reduce debt and regain financial stability.

Start by researching nonprofit credit counseling agencies that provide free or low-cost financial advice and assistance. These organizations can help you create a repayment plan, negotiate with creditors or even consolidate your debts into manageable monthly payments.

Additionally, community-based programs may offer emergency financial assistance, workshops on budgeting or debt management education.

Another valuable resource is employee assistance programs (EAPs) provided by many employers. These programs often include financial counseling and tools to help you manage debt effectively.

Online resources, such as debt repayment calculators and financial literacy courses, can also provide guidance tailored to your situation.

By tapping into these resources, you gain access to expert advice and potentially reduce the time and stress involved in managing your debt. The support provided by community programs can make a significant difference, especially for those navigating debt for the first time.

Choose the rights for your debt-free journey

Getting out of debt requires determination, consistency and a willingness to explore strategies that align with your financial situation. By negotiating with creditors, seeking professional guidance, leveraging tools like balance transfer cards and adopting zero-sum budgeting, you can make steady progress toward financial freedom.

Remember, each strategy offers unique benefits, so choose the one that best fits your needs and goals. If you’re looking for personalized advice, reach out to Associated Bank to explore financial solutions tailored to your journey. With the right plan and resources, a debt-free future is within reach. Start your journey today.