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10 Super Strategies To Manage Your Debt

Not long ago, I received this question from a reader. It tells of how he incurred debt while still in college, a common time for people to begin racking up debt:

How Do I Handle My College Debt?

“I have just gone through your blog and have a query. Actually in my college days I spent lots of money and am now under deep debt. Sometimes I took payday loans. So now I want to get rid off these. I have started debt consolidation. Can you give me some other strategies to handle my debt?”

Debt can creep up on you as time goes on, and can be overwhelming after some time. But it can be vanquished with discipline, determination and commitment. Here are my suggestions for wiping this monkey off your back!

Strategies To Get Out Of Debt

1)  Don’t incur any more debt, stop financing your purchases and start using cash for everything. Cut up and throw out your cards and then use cash instead.

2)  Stop spending on things you don’t need. Spend only for the essentials, and avoid impulse purchases.

3)  Embrace thrift and look for ways to cut costs.

4)  Try to build up your income. Are there paid jobs or projects you can take to improve your cash flow? Opportunities abound but you’ll need to scout them out.

5)  Develop both spending and savings plans. Create a budget as part of your spending plan and begin an automated savings program to help you clarify and execute your financial goals.

6)  Visualize the debt as just another opportunity to establish a savings plan. The money you use to pay down your debt can eventually be rerouted into a savings account once you are in the black.

7)  Pay more than just your minimum balance on any loans you own. At the very least, pay more than the minimum towards your credit card balance.

8)  Consolidate your debt and move your balances from high interest cards to those credit cards with the lowest interest rates you can get. For this, shop around for low interest credit cards and read all the fine print before signing up for any cards. You can also be resourceful and find ways to borrow money under more favorable terms, say through person-to-person lending via Prosper.

The Silicon Valley Blogger (SVB for short) is behind the The Digerati Life, a blog that covers personal finance, business, investment and real estate topics along with the occasional Silicon Valley tech story sprinkled in. SVB is a married mother of two young kids who juggles a nine to five job in the IT industry along with raising a family and various entrepreneurial pursuits.

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3 Responses

The Digerati Life | December 17th, 2007 at 10:44 pm


Thank you for featuring my post! Although the last 2 tips I had were not included in the article in order to accurately reflect the 10 strategies in the article’s title. Here they are anyway:

#9 Prioritize your funds. If you have money saved up earning very low rates of return, then determine if they should be used to pay down higher interest debt.

#10 Apply a debt payment approach and stick with it. One such technique is to pay off your loans with the smallest balances first. This may be the most encouraging approach as you retire your loans more quickly this way. Alternatively, you can pay off the costliest loans or those with the highest interest rates first. By doing so, you’ll spend less to retire your loans.

Thank you!


posted in Personal Finance Education 3 comments »

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