25 Ways to Become Debt-Free by 2025

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Oct 09, 2024

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Becoming debt-free is one of the most freeing financial goals you can set for yourself. Whether it's student loans, credit card balances, or personal loans weighing you down, breaking free from debt is all about having a solid plan and sticking to it. Here are 25 practical and effective ways to help you become debt-free by 2025.

Create a budget

People often hear the term “budget” and cringe. It’s boring and basic, but vital to achieving financial freedom and living debt-free. A budget allows you to track how much money is coming in and where it’s going each month.

Start an emergency fund

Unexpected expenses can be a big contributor to keeping you in consumer debt. Without a way to pay for the car repair or trip to the emergency room, we often resort to credit cards. An emergency fund is a stash that’s set aside just for such expenses.

Use the debt snowball method

This debt payoff method starts with aggressively paying the lowest loan balance first, while still making minimum payments on all your other credit card balances. After you pay that first account off, you roll that monthly payment into paying off the next lowest loan amount.

Use the avalanche method

This debt payoff solution tackles your debt based on interest rate. You start with the highest interest rates first. Similar to the snowball method, once you pay off the first balance, you’ll roll that monthly payment to pay off the next high interest debt you have.

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Many credit card issuers offer 0% APR for a limited time to entice new uses. You can use this to your advantage to save money while paying off your debt. Use a balance transfer to move your credit card balance from one issuer to another.

Open a high-yield savings account

High-yield savings accounts are like a regular savings account, only with a much higher interest rate. If you have money sitting in a savings account like your emergency fund, transferring it to a HYSA allows you to earn interest on the balance. You can use those extra funds to pay off credit card debt or other loans.

Get a debt consolidation loan

If you’re struggling to manage multiple debt payments, a debt consolidation loan can allow you to roll multiple loan balances into one single payment. While this option won’t reduce your total loan amount, it can help simplify debt repayment.

Seek professional debt relief

Sometimes, debt can become overwhelming and you may need to help to get a hold of your financial situation. Companies like National Debt Relief offer free consultations and have a team to negotiate repayment terms with credit issuers on your behalf.

Refinance student loans

Student loan debt has been a hot topic in the news over the last several months with the Biden administration trying to provide additional relief for borrowers. Whether your loans are issued by the Department of Education or a private lender, check your eligibility with companies like SoFi to see if you can lower interest rates or consolidate payments.

Cut your subscription services

A survey done by Self Financial, shows that most Americans pay for 3 subscriptions they’re not using each month. Perform a subscription audit on your services and see which ones you’re actually using—cut the ones that you can live without.

Work a side job

There are so many ways to make extra money with side jobs. You can start a side hustle from home, pick up gig work or get a part-time job on the weekends. Anything you earn outside of your usual paycheck can go directly toward paying off your debt.

Automate your payments

Set up automatic payments for your debt payments so you never miss a due date. It’s one less thing you have to think about, while helping you avoid racking up late fees, adding to your debts.

Sell stuff you don’t need

Your home, closets, and garage are likely full of things you aren’t using. Local consignment stores or online marketplaces are a great way to offload items you don’t need and make some extra cash to put towards your debts.

Try going cash only

If you are struggling with credit card debt, think about switching to cash. When you are limited to only the cash in your wallet, you can’t overspend. This method can help you stick to your budget and debt payoff plans.

Cut up your credit cards

Canceling your credit cards can result in dropping your credit score. If you’re having a hard time not using your credit cards, simply cut them up. It won’t impact your credit score, but it will prevent you from being able to add more debt.

Keep track of your progress

If you have thousands of dollars of debt, it can get discouraging to look at how far you still have to go. Keep track of all your success and be proud of all that you’ve accomplished.

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Get support

Whether you join a support group in your local community or simply ask friends and family to help keep you focused, having support can help keep you on track with your financial goals.

Use windfalls wisely

Windfalls refer to any sum of money that comes your way unexpectedly. It can be in the form of rebates, tax returns, or work bonuses. Make sure to use that extra cash to pay down your debt, rather than treating it as “free money” to go and spend.

Make small payments

You might be surprised to discover how quickly small payments can start chipping away at your debt balances. If you find yourself with an extra $5 or $10 at the end of the week, transfer that to one of your debts instead of letting it sit in your bank account or wallet.

Skip the drive-thru

Convenience is nice but is it worth the cost? Eating at a restaurant will cost you five times the amount it would to eat at home. If you want to become debt-free, eat the majority of meals at home. Use your cost savings to put towards any outstanding balances.

Shop around

Have you looked at your insurance, phone carriers, and other providers to see if you’re overpaying? Shopping around can make sure you’re getting the best price. Often when you switch providers, you can save with introductory rates or promotional deals.

Use cashback reward sites

If you prefer to shop online, use cashback reward sites like Rakuten, to get the most bang for your buck. Rebates sites offer you a small kickback when you shop through the website. These small percentages add up, and you can cash your rewards out to pay down your debts.

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Get a roommate

Housing is one of the biggest costs for households. If you have a spare room, consider getting a roommate or even renting the room out occasionally. This can help reduce your largest expense each month and you’ll have more money to put towards your financial goals.

Take surveys

Most online surveys pay $.50 to $5, but you can earn more if you qualify for specialty surveys. While taking surveys won’t make you rich, it can be an easy way to make some side cash to throw towards your debt.

Downsize your lifestyle

Consider downsizing your home, car, or overall lifestyle to lower your monthly expenses. Living in a smaller space or driving a less expensive car can free up significant cash for debt repayment.

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The bottom line

The path to financial freedom doesn’t require drastic changes overnight—it’s more about consistent, smart decisions that add up over time. Celebrate the small wins, stay focused on your long-term financial goals, and don’t be afraid to adjust your plan along the way. With these tools, 2025 could be the year you finally achieve financial freedom.

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Holly is a freelance writer who recognizes that there isn’t a one-size-fits-all approach to personal finance. She is passionate about entrepreneurship, women in business and financial literacy. When she is not working, she is testing out new recipes, tasting the newest Trader Joe’s finds or binging the latest true crime podcast. She resides in Utah with her husband, two daughters and dog, Max.

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