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How to Get Out of Debt: The Ultimate Guide

Being in debt is a horrendous experience. The average American is more than $90,000 in debt, and this comes with a whole host of issues, including decreased financial security, increased stress and worry, and more.

You’re here because you want to learn how to get out of debt, and we’re going to help you do just that. We’ll take a look at a range of different methods that can help when paying off debt, either by reducing your monthly payment, cutting other expenses, and more.

When you’ve finished this article, you’ll be better equipped to pay off your debt, and can make a start today. Are you ready to learn more about getting out of debt and how you can do it? Then read on!

Get Organized

What are your outgoings each month? It’s possible that you don’t really know how much money is leaving your bank account, as loan and credit card repayments can all blur into one after a while. 

Go through your bank statements from the last few months and make notes of every recurring payment. Write them all down, then add up their amounts to come up with your total debt outgoings per month.

Now you know how much you need to pay each month at a minimum.

Stop Adding to Your Debt

This step sounds obvious, but it can also be the most difficult step of all. When you’re deep in debt and making payments each month, the money of your own can be hard to come by, which can result in you using your credit card more, taking out payday loans, and other solutions that are very harmful in the long term.

You should try to avoid borrowing money from anyone while you’re in this stage. Just try to live from paycheck to paycheck while you make a start on paying off your debt.

If you’re desperately in need of money for essentials, then you could consider asking family or friends to lend you money. These kinds of loans don’t come with an expiry date, nor do you need to make minimum payment towards them each month.

Try to focus on your needs, rather than your wants. You can focus on those more once you’re out of debt.


Budgeting is a crucial skill for people who are in debt. You need to know how much you’re spending per month on everything. This includes:

  • Debt repayments
  • Food
  • Rent
  • Bills
  • Subscriptions
  • Fuel
  • Insurance

Once you’ve got all of this accounted for, you can see how much money you have leftover per month. If you’re in a negative balance at the end of each month, it’s time to start cutting your expenses.

This could mean cutting subscriptions, lowering your food expenses per month, driving fewer miles, or a combination of these. You want to be breaking even at the end of the month, at least.

If you have money left over, that’s great! You can start putting that extra money back into your debt.

Focus on One Debt at a Time

If you want to pay off your debts effectively, you may want to focus on one debt above all others. This means making the minimum payment towards all but one debt, then putting all of your leftover cash towards that particular debt.

This will help you pay off that one debt faster, then you’ll have more money at the end of each month to focus on the next debt, and so on.

This kind of repayment is sometimes known as the debt snowball method, as your leftover cash will continuously accumulate as you pay off each debt.

You may wish to start with smaller debts first. If any of your debts have a very short term, you may wish to start with this first instead.

Consider a Balance Transfer

If you have a lot of credit card debt or other debt, you may wish to consider a balance transfer. This is where you move all of your old credit card debt onto a new credit card. This is especially good if the new credit card has a zero percent interest rate for a certain period.

However, you should be quite cautious about doing this. While the new card might have a zero percent interest rate, this isn’t going to last forever, and the card’s interest rate might end up being higher than your old card’s. This means that if you’ve not paid off the debt by the end of the zero percent interest rate period, you’ll start accumulating more debt on the new card and will be in a worse situation than before.

Consolidate Your Debt

If you’re having trouble keeping track of all of your payments each month, you may want to consider consolidating your debt. If you do this, a company will pay off all your debt and take it on themselves, charging you one payment per month.

Debt consolidation can make it far easier to budget for your monthly payment, which can make your life easier and less stressful.

You will still need to make lifestyle changes and budget effectively, however. If you don’t make these changes, you’ll find that you’re in just as much debt as you were before. Consolidating your debt doesn’t reduce it, it simply makes it easier to manage in some cases.

How to Get Out of Debt: Careful Money Management

We hope that you’ve enjoyed this guide on how to get out of debt. If you use our strategies, particularly with respect to lowering your outgoings and managing your money more effectively, you should be able to start digging yourself out of debt.

If you’re having a tough time with debt and need more help, please note that help is always out there. Numerous government bodies and NGOs can help you: you’re never alone.

For more helpful posts like this, check out the rest of our blog!

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