6 Unconventional Hacks to Slash Your Debt When You Owe Over $20K

Hack 1: The “Frozen Card” Method

Getting rid of credit cards entirely isn’t usually a great idea, as closing down accounts can hurt your credit score. Plus, you may want to make big purchases using a card to earn rewards, or you may feel like you need a card available in case of emergencies (although you should work on building an emergency fund to avoid that outcome).

The problem is, charging stuff to your cards can be very tempting, especially if they’re just sitting in your wallet. If you’re looking for an unconventional hack to spend less and put more money toward debt payoff instead, try freezing your credit cards in a big block of ice.

If you freeze your card, you won’t be able to use it until it thaws. This pause between when you want to charge something and when you actually can charge something will go a long way towards curbing impulse spending.

As the card is thawing, take that time to think about how much interest you could save, and how much faster you could become debt-free, if you put the money you were planning to spend towards paying down your debt and instead of increasing it. Hopefully,  mulling over the benefits of becoming debt-free sooner will prompt you to put that card right back in the freezer before it thaws. 

Hack 2: Skill-Barter Block Parties

Chances are good that you have some talents — and your neighbors might have their own set of skills as well. So, why not help each other out to save money or even earn a little money toward debt payoff? 

You can do this by hosting skill-barter block parties where you and your friends and neighbors come together to offer up your services either for payment or for a trade.

For example, you may be great at simple home repairs like re-caulking windows or hanging up pictures, while one of your neighbors or friends may have experience fixing up broken lawn mowers. If your mower has been on the fritz, you can do some basic repairs at your friend’s place in exchange for them fixing it up.  If you barter your services, you can redirect the money you were going to pay toward mower repair or the purchase of a new mower to debt payoff. 

As the people in your life learn about your skills, they may also want to pay you for them, directly generating cash you can put toward your debt.

Just be sure that all parties involved understand the terms of the barter or trade arrangement you’re entering into. There are simple templates available online for these types of agreements, so have them available at your event so you can get everything in writing. 

Hack 3: Virtual Garage Sale Flash Mobs

Garage sales are a good way to earn money to pay back debts while getting rid of your unwanted stuff. However, no one wants to sit in the garage all day. Plus, when you host a traditional garage sale, you often attract bargain hunters looking to pay ultralow prices — and you may not find people interested in what you have for sale. 

Instead, host a virtual garage sale flash mob to save time and money, and better connect with potential customers.

Organize your flash mob sale by connecting with a bunch of friends who also want to sell too and by scheduling a special online event where you all post your items for a limited time. Use social media to list your items and promote the big sale as a limited-time offer to generate more buzz and convince people to take a look at what you’re offering. 

There are Facebook groups and online websites dedicated to virtual garage sales, so you can join an existing one or start your own group. If you do this right, you’ll generate enough cash in under 48 hours to make large extra payments on your debt. 

Hack 4: The Incremental Jar Challenge

It’s hard to get into the habit of putting aside money for debt payoff, but if you make it fun and start small, it becomes easier. One way to do this is to participate in a challenge where you put a little more away each day. For example, on day one, you could put $1 into a jar, then $2 on day two, then $3 on day three, and so on. If you can continue this all year long, you’d end up with over $66,000 in a single year to put toward debt payoff.

Of course, not many people are going to be able to keep that plan going, but you can challenge yourself to see how far you can get into the year before you must stop.

Or, if you have far less than $66K to use for debt paydown, you can do the simpler 52-week challenge. This increases contributions by $1 per week and nets you $1,378 by year’s end. Of course, that’s a lot less than $66K, but every little bit helps.

You can do these challenges with a physical jar and actual cash. If you do, set a reminder on your phone each day to make your deposit. You can also automate this process by having money transferred directly from your bank account to savings or towards extra debt payoff. If you automate the process, you’re less likely to miss a contribution since it becomes the default.

Hack 5: Micro-Gig Bulk Deals

Picking up some side work can help you pay off debt, but it can sometimes be hard to generate enough business to make a meaningful difference in your debt payoff when you owe $20K or more.

To make enough to significantly reduce your debt, consider offering a bulk deal for your services. You can create packaged “task bundles” on sites like Fiverr or TaskRabbit and offer someone a discount if they pay a bigger amount up front — such as at least $500. 

This not only lets you make larger payments, but it also provides more incentive for others to buy what you’re offering since they are getting a bulk bargain. Just be sure you and your buyer know exactly what is included and create a written contract to protect both of your interests. 

Hack 6: Community Crowdfunding—With Accountability

Finally, if you want to get some extra help with debt payoff, consider launching a small GoFundMe focused on debt relief. You can incentivize others to contribute by creating a public payoff tracker so those who give money can see that you’re making progress. You can also set an ambitious goal, so even if you don’t collect the entire amount you owe, you can still get closer to paying off your debt. 

You do need to understand your tax obligations when you collect donations, though. If you collect money for personal reasons and aren’t selling anything, the donations may be considered non-taxable gifts — as long as they are below a certain threshold. If you make a lot of money, though, it’s worth asking a tax professional if you have any obligations.

And, be sure to be honest about your goals and objectives, as well as who you are, so you don’t end up facing claims of fraud.