Get out of debt - fast! (continued)

6. Think big

Nancy Nelson of northern Saskatchewan turned her love of wild berries into a successful business. In between farm chores, she started selling homemade preserves on eBay.ca and soon branched out to antiques, clothes and collectibles found on her yard-sale and auction jaunts. The profits went into a separate bank account. "Within a couple of years, I had earned enough to pay off our mortgage!" she says.

Hellen Koufakis of Toronto also set her sights on a higher cash flow when she was saddled with $12,000 in back rent and unpaid utility bills after her divorce. "I was a receptionist and was determined to find a better-paying job. I moved to a temp agency and landed a contract position, which led to a permanent job as an executive assistant. I now make almost twice as much as before and that income, combined with a budget that has become a habit, means I'm now doing marvellously well."

7. Make creative cuts

The old "tighten your belt" advice is true: start reducing your costs wherever you can. You'll be surprised at how quickly small cuts can make a big difference. "One of my clients paid off her debts almost a year ahead of schedule just by colouring her hair at home, rather than at the salon, and applying the savings to debt repayment," says Lori Bamber, Chatelaine's Ask an expert financial columnist.

Kathryn Anderson, a program administrator for a career centre in Vancouver, agrees. "When I tracked my expenses, I found I was buying a lot of groceries, but wasn't using them because I was eating out instead. Now I have a monthly food budget that I decide how to spend, and if it's a lot of restaurants and a few tuna sandwiches, it's ok as long as I stay within my budget. This way I don't feel deprived."

8. Get a loan(Yes, that's right, a loan!)

Toronto resident Sera Weiss got fed up with making only the minimum payment on her credit cards each month and living paycheque to paycheque, so she took action. First, she discussed her situation with her family, and her grandmother and aunt gave her a combined one-time-only cash Christmas gift to help her get out of the hole. Then she went to her bank and got a $5,000 loan with set payment terms and a repayment schedule at a substantially lower interest rate than her credit cards. "My bank really wanted me to open a line of credit instead, but I knew it would have been too easy to dip into, and I would have ended up further in debt. I needed to know I had to repay a certain amount each month for a limited amount of time." Now she's out of debt and lives within her means.

If you are employed, have a good credit rating and some form of collateral, you could probably qualify for a consolidation loan from your financial institution, says Bamber. "This is good for people in a tight, but not extreme, situation," she notes. "A consolidation loan is a bank loan you use to pay off your various debts, leaving you with one debt, generally at a better interest rate, and one monthly payment."

9. Dip into your RRSPs

Does the very idea make your hair stand on end? Guess what: RRSPs don't have to be sacred, especially if you have lots of unused contribution room. "If you're earning eight per cent interest on your RRSP assets and paying 18 per cent interest on your credit-card debt, the idea of saving for the future is a complete illusion," says Bamber. Crunch the numbers to see if it's worthwhile for you. Then, once you've paid off your debt, talk to your financial adviser about balancing your RRSP withdrawal with a low-interest RRSP loan(generally easy to qualify for)that can be used to reinvest, lower the amount of tax you pay and get you back on track.