Probably the most critical step to getting out of debt is to quit borrowing. That said, the idea of turning to debt for help is so pervasive that it can be hard to even think of alternatives to borrowing money. Especially when you’re stressed out and worried.
But there are other choices out there, and many of them are easier than you think. Here are 5 alternatives to borrowing money:
1. Say “not right now” or “not yet”.
Many of the things we think we “have” to borrow money for aren’t true “must haves”. For example, suppose your AC or heat breaks down, and you don’t have the money to repair yet. Unless your 90 year old grandma lives with you and you have absolutely nowhere else for her to stay temporarily, you can probably just grin and bear it until you’ve got the money. (And this is coming from someone whose AC keeled over one Arizona summer while she was pregnant.) Yes, it will be uncomfortable. But the pioneers did it, and at least it’s not debt.
This idea applies to other things too. If it’s easier, you can turn “not right now” into “Sure, as soon as we save up the money.” Which leads me to…
2. Make more money.
The way to do things without borrowing money is to have the cash available. That can mean going out and earning more money, paying as you go (such as by working your way through college), selling stuff you no longer need to get cash, or a combination of the three. Even babysitting could earn you an extra $6-$20 an hour, depending on typical rates in your area.
3. Ask questions.
Say you’ve just been told that it will cost $8000+ to repair your car. But you’ve only got $3,500. Try literally saying things like “I really want to do this, but I don’t have that kind of money. What’s the bare minimum it would take?” or “How can we keep costs down to something I can afford?”. (Just remember to state “Oh, I don’t borrow money anymore. I’m working to get out of debt.” if they offer financing as an alternative.)
You could also ask what the consequences will be of delaying or skipping whatever it is, how much it might cost to do it yourself, or if there are any agencies that might help you out. Don’t forget to ask more than one person, too. You’re likely to get different quotes and different answers as you talk to multiple people. Whatever the situation, asking questions is usually a great way to create alternatives and save money — enabling you to accomplish your goal without borrowing money.
4. Say no.
Yes, you really want to do whatever it is. You want get rid of those horrible fake butcher block counter tops from the 70s, tell your child they can go on that trip, or attend your loved one’s funeral. But remember that more than that, you want to get out of debt.
So say no. The counters will still be there for you to rip out later, your child won’t remember the missed trip 20 years from now, and your loved one will understand.
5. When you’re really stumped, lean on others.
Many people are glad to help out with time, effort, skills, tools, pointers, ideas, and even supplies. People like your family, friends, neighbors, coworkers, acquaintances, and sometimes even strangers. But you won’t know whether or not they can help unless you ask.
If you feel uncomfortable directly asking someone you know for help, go the indirect route instead: “Do you know anyone who might be willing to help me with ______?” or “Do you have any ideas about how I could solve this problem?”. You might be surprised at their answers. Remember that people like to help. And of course you can pay it forward when someone else needs help in the future.