How Struggling Families Can Get Out of Debt: Expert Advice and Best Practices

Debt can feel overwhelming, especially for families facing the challenges of balancing everyday expenses with mounting bills. In 2023, the average American household carried $101,915 in debt, with credit card debt alone averaging $7,279 per household, according to the Federal Reserve and Experian. For many, debt is a primary stressor, leading to anxiety and limiting opportunities to save for the future. But while it might feel daunting, getting out of debt is possible with a structured approach and expert advice.

Here are some proven strategies for getting your family back on a financially secure path, including a look at how selling unused items through online marketplaces can be an effective part of this journey.

1. Understand and Assess Your Debt

Before tackling debt, it’s essential to have a clear picture of what you owe. Create a list of all outstanding balances, including credit cards, student loans, medical bills, and mortgages. Note the interest rates on each and identify any upcoming payment deadlines.

Pro Tip from Experts: David Ramsey, a personal finance expert, recommends listing debts from smallest to largest and focusing on paying off the smallest first. Known as the “debt snowball” method, this approach helps build momentum as each small victory boosts confidence. Conversely, the “debt avalanche” method prioritizes high-interest debt first, saving you more on interest over time.

2. Make a Budget That Works for Your Family

A well-structured budget is essential for getting out of debt and staying out of it. A 2023 Bankrate survey revealed that only 48% of Americans use a budget to manage their finances. Creating a family-friendly budget that accounts for essentials, debt repayment, and savings can help you track spending and identify areas for potential cuts.

Tips for Budgeting Success:

Use a 50/30/20 rule as a starting point: allocate 50% of income to necessities, 30% to discretionary spending, and 20% to savings and debt repayment.
Take advantage of budgeting apps like Mint, You Need a Budget (YNAB), or EveryDollar to simplify tracking and planning.
Hold regular family budget meetings to set goals and track progress together. This creates a sense of unity and accountability.

3. Consider Debt Consolidation Options

Debt consolidation involves combining multiple debts into a single monthly payment, often at a lower interest rate. This can make debt easier to manage and may reduce the total interest paid over time. According to the American Fair Credit Council, debt consolidation or relief programs can reduce overall debt loads by 25–50%.

Options Include:

Personal loans
Balance transfer credit cards (for credit card debt)
Home equity loans or lines of credit

Research carefully, as these options may come with fees, and not all may suit every situation.

4. Sell Unused Items on an Online Marketplace to Generate Extra Cash

Selling unused items around your home can be a powerful way to boost your family’s debt-repayment efforts and clear clutter at the same time. In recent years, online marketplaces like LookPrior Marketplace, eBay, Mercari, and Poshmark have made it easy for families to turn household items, toys, clothing, and gadgets into cash.

Why Selling Online Helps Families in Debt:

Immediate Cash Flow: Selling items online is quick and can help generate funds for pressing debts.
Low-Cost Solution: Most online marketplaces charge minimal fees, making them a budget-friendly option for earning extra income. LookPrior Marketplace allows you to post for free. The platform also allows its users to post videos of the items for sale to attract more buyers.
Sustainability: Clearing out items you no longer need supports a more minimalist lifestyle and helps prevent future impulse spending.

Tip: Take quality photos and write detailed descriptions of the items you’re selling. For example, if you list gently used children’s toys or electronics, list all features, provide relevant measurements, and note any imperfections. Pricing items affordably also helps them sell faster, bringing in money when you need it most.

5. Embrace the Power of Side Hustles and Increase Family Income

Taking on a side hustle can substantially impact your debt repayment journey. Many families today use side jobs or freelance work to generate extra cash dedicated solely to debt repayment. Popular side hustles for families include:

Freelancing online (writing, graphic design, tutoring)
Driving for rideshare services
Providing local childcare or pet-sitting services

Side hustles may not be a long-term commitment, but they can accelerate your debt repayment during the short-term.

6. Build an Emergency Fund, Even While Paying Off Debt

One of the most common reasons families fall deeper into debt is a lack of emergency funds. According to Bankrate, 57% of Americans couldn’t cover a $1,000 emergency without using debt. Although saving money while paying off debt may feel counterintuitive, an emergency fund protects you from taking on more debt when the unexpected happens.

Start Small: Even setting aside a few hundred dollars initially can make a difference. Over time, aim to build an emergency fund that covers three to six months of essential expenses.

7. Seek Professional Help if Needed

If your debt feels unmanageable, don’t hesitate to ask for assistance. Credit counseling agencies, certified by organizations like the National Foundation for Credit Counseling (NFCC), can help create a customized plan to get you out of debt. These counselors offer debt management plans and budgeting assistance and can negotiate with creditors on your behalf.

8. Stay Motivated with Family-Oriented Rewards

Paying off debt as a family is challenging, so celebrate small victories. Set milestones, such as every $1,000 paid off, and celebrate with family-oriented rewards that won’t break the budget, like a movie night at home or a picnic at a local park.

Final Thoughts

Getting out of debt as a family requires discipline, creativity, and teamwork. Families can tackle their debt head-on with a clear plan, budgeting, side income, and strategies like selling unused items online. Remember, the journey to debt freedom is a marathon, not a sprint, and every small step brings your family closer to a future of financial stability and peace.

By following these expert-backed strategies and including everyone in the process, families can reduce debt and work towards a brighter, debt-free future.