Will 2021 Be The Year You Break Free Of Debt?

Have you got a large amount of debt? Many of us have, whether it is a mortgage, finance on a car, loans, store cards, credit cards, or something else. When you have a significant amount of debt to your name, it may feel like you will never be able to clear it. Add to that the current economic situation that many of us find ourselves in because of the ongoing COVID-19 pandemic. However, it is always possible. Sure, it will take time and probably a lot of sacrifices and changes, but it is more than doable. 

Here, we look at some of the things that you should be thinking about doing in order to make next year the year that you break free of debt.

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Add up what you owe


Before you can do anything, you need to know how much you owe and to whom. This can be the hardest step, but you can’t move forward with paying off and sorting out debts until you know this. Grab a drink, take hold of all of your bank statements and letters from creditors and all of your bills and work out what your overall total of debt is. Make a note of who it is to, and when the debt was taken out. 

This really is the most frightening bit for lots of people, and many people find that they owe more than they thought. However, if this is the case for you, do not panic. You are taking the first step towards freedom from your debts and getting them sorted out. Burying your head in the sand is the worst thing that you can do when it comes to finances – that may be what got you in this situation in the first place.

Look at how to reduce your outgoings

This is where the sacrifices that we mentioned above come into practice. If you are going to pay off your debts, you need to cut your spending. Let’s take a look at some of the things that you can cut out or reduce:

Home and shopping costs

  • Heating: Look at whether you can turn down your thermostat down, even by one degree. If it is cold, put on amn extra sweater or snuggle up under a blanket rather than immediately turning the central heating on.
  • Windows and doors: Close all of your windows when you are not in a room to keep the warmth in. Consider using draught excluders if you have cold air sneaking in under doors. 
  • Utilities: Review your utility bills – use a price comparison website to make sure that you are getting the very best deal
  • Replace all of the standard light bulbs in your lights with energy saving bulbs
  • Turn off any electrical items when you are not using them. Remember, leaving things on standby still means that they are using some electricity
  • Cancel any newspaper or magazine subscriptions and read them for free online or borrow them from your local library
  • Check your cupboards and pantries. Do you have lots of excess food that you can use instead of going to the supermarket and buying more groceries?
  • Consider writing out meal plans to avoid buying food that you do not need, and look at how you can use up leftovers
  • Look at swapping from premium brands to store brands. One way of seeing if you like it is to start with the very cheapest brand. If you like it, stick with it. If you do not like it, move up to the next cheapest brand and so on
  • Look at the loyalty schemes that you are part of and take advantage of any offers

  • Consider couponing – look online and in brochures and magazines for any coupons that would save you money on your usual shop


  • Are you paying for extras with your bank or building society for services that you no longer use or need?
  • Are you paying high overdraft charges but have money in other accounts that you could use instead?

Phone, internet and TV

  • Are you being charged for any additional services such as roaming by your cell phone company that you do not use and can cancel?
  • If you have more minutes, text messages or data on your plan than you can use, see if you can reduce your plan
  • Look at your TV subscriptions. Do you really need to be signed up to Cable, Netflix, Amazon Prime and Disney Plus? Can you cancel any?

Work and lifestyle

  • If you jump in a cab regularly to get to places, see if you can share lifts with friends or use buses or trains instead
  • Cancel that expensive gym membership and find some free workouts on YouTube to do at home or go out for a jog with a friend
  • Stop picking up a coffee on the way to work and take one from home in a flask or travel mug
  • Spend some time each night making a packed lunch or easy to grab breakfast to take to work instead of paying for something on the way or in the staff break room

Increase your income

You can only cut back your income so far. There are always things that you have to pay out to get through daily life. If you have cut back as much as possible and it still is not enough to make a significant dent in your debt, you may need to look at ways of increasing your income. Here are some ideas:

  • Make sure you are claiming any welfare or benefits that you are entitled to
  • Check to make sure that you are not paying too much tax, and claim for a tax rebate if appropriate
  • Increase your hours at work if possible or take on some overtime
  • Ask for a payrise!
  • Get a second job – if you have any useful skills such as writing or photography, look at setting up as a freelancer on the side and earning some cash in your spare time. Websites such as People Per Hour, Fiverr and UpWork are good places to start looking for gig work.
  • Look around your house – is there anything that you no longer need or want and can sell to generate some money?

Once you have increased your income as much as you can and cut back on your expenses as far as possible, you will have a much better idea of where you stand with being able to pay off any debts. 

First of all, if you are in serious debt, you may want to get in touch with Leinart Law Firm/ to see how they can help you. You should also look at the statute of limitations law. Essentially, after a particular period of time, a debt is no longer enforceable. Of course, the creditors will not tell you this and many people will continue paying debts that they are not obliged to. This varies state to state and there are conditions attached, so do your research first. 

Something else that you can consider doing is contact your creditors and negotiate with them. If you have the money available to pay off a chunk of your debt in one go, they may be willing to write off the rest of your debt. Others may halt or lower your interest rates, whether permanently or until you are in a better financial position. This is more successful if you have previously maintained a good relationship with them and have kept the lines of communication open.

If you have some savings, now may be the time you need to think about breaking into them and using them to pay off at least some of your debt. Of course, it is lovely and a wise idea to have a cushion of money to sit upon. However, if you are allowing it to sit in an account going unused and earning very little in the way of interest while you struggle with debts, it is not working well for you. You do not have to use all of it, but if you can pay off the debts that are more urgent or have a higher interest rate, you will find that in the long-term, you will be better off.

Debt can feel overwhelming. It can feel isolating and worrying, and so many people bury their heads in the sand and try to ignore it. While this may bring short term comfort, in the long run it will just create more problems which become more difficult to get under control. Take action and look at the various avenues and options available to you that so that 2021 can be the year that you finally begin to break free of debt.

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