We have all been in a certain financial crunch that has compelled us to either take a loan or borrow money from someone – but returning that money, especially when interest gets added into it, is a real problem. That is exactly what happened with debt. While it is a temporary fix to most of our financial troubles – it becomes a nightmare to pay back the money you’ve borrowed. People spend years and years, even die while trying to get out of debt, to no benefit.
We have all learned the art of pretending to be okay when in debt – however, there is nothing good about being burdened in debt. Once it catches up with you, that’s when you wish you had done things differently earlier, whether it’s a mortgage or personal loan. Bills, credit cards or the most popular student loans – Americans are buried in debt, one way or another. Every person we know around us is paying off at least one type of debt – the total amount owed by people is on an overall rise. So what can one do to get out of debt and live the rest of their lives debt free?
Well, trying to get out of debt is everyone’s dream – we all wish we would find a way to live our lives debt free. But, unfortunately, it is not that easy – sometimes, it might take all you have saved up for a rainy day to make sure the debt doesn’t come back. However, luckily it is also not impossible – with the right tools, mindset and strategies, you can get yourself free from impending debt.
If you are reading this article, we are sure you want to get out of debt – so without further ado, let’s get to it!
1. Make a Decision To Get Out Of Debt

When planning your finances and your future life, the first and foremost step is to analyze your life and make a decision about it. We are not asking you to make a difficult life decision- at this point, a small decision like “I am finally done with debt” is enough. This is the first step toward financial stability, not just toward the strong feeling that you need to get out of debt but also to realize that the life you have been living is not what you want for your future.
So before taking any practical steps or finding a way to pay your bill, sit and decide that you want to change your life and not live under the increasing burden of your debt. This is how you will not only do a favor to your financial future but also to your family and generations to come – you don’t want your children to grow up and take this decision for you.
2. Face Your Debt Head On
Debt sure sounds scary, but running from it will get you nowhere – in fact, you will always be stuck in this loop which will always bring you back your bills and your dying bank account. If you want to get out of debt, you will have to face it head-on. This might not be your case, but most people think not facing their debt, not opening their bills, not talking to financial agents and not visiting their bank will have their debt disappear magically – but that is, of course, not true.
In fact, all it will do is keep bulking up your debt until one day you’re way under it and just can’t survive or come out of it. Stop playing hide and seek with your bills, don’t throw them away unopened – this will not make them vanish. Take time for yourself and your finances, bring all your loan statements and bills and write down your budget. And then start adding your finances. This will help you face reality – see if your base payment meets your income or not. To get out of debt you need to change your mindset.
3. Bring Lifestyle Changes To Get Out Of Debt

Once you start facing reality, you will be able to see whether you need to bring changes in your life or not – and if you do, then what changes must they be? Like we said above, start adding your finances and see if they fit your income. Your essentials, such as your electric, water, and heating bills, then your grocery and necessary expenditures for your survival are all your base payments.
You need to see if your base payments can fit your net income – and if they can, you must make a lifestyle change in your life – this is also called re-examining your budget. Being frugal while trying to pay off your debt is nothing; if anything being frugal will help you save up on extra bucks that you can use to get out of debt.
Some ways you can bring lifestyle changes and live a frugal life to save money are:
● House Rent and Utilities
Find a smaller place to live – your huge apartment might feel comfortable and look good but if you’re living alone or have a small family – save up on your rent and shift to a smaller place. Additionally, this will so help you save on utilities as a smaller house accounts for lesser electricity, water and heating bills.
● Shopping
Another way to get out of debt is to start smart shopping – don’t go spending on impulse purchases; instead, make a list of what you want so you only spend on your necessities. However, try visiting stores when a sale or a promotion is going on – there is no harm in availing of discounts. Find coupons if you can; they will help you in saving a lot on items that are otherwise expensive.
● Food and Eating Out
Avoid eating out – eating out may seem fun, but you spend a lot more money at a restaurant for one meal than you would on the groceries that you need for cooking meals for an entire day. Make a meal plan for yourself so you know you can cook what you like instead of having to eat cheap food and instant meals. No one’s asking you to stop eating out entirely; you can take a break sometimes but don’t make it a habit. A cup of Starbucks coffee can easily be replaced with homemade coffee – so you can ditch that and be on your way to get out of debt.
● Hobbies
Find only worthwhile hobbies. Spending on your hobbies is no harm, but imagine yourself dying in debt but spending over $200 on golf – does that even sound right? Find hobbies that are good for you but also for your bank account. No need to spend on fancy gym memberships or expensive swimming lessons. Engage in activities that you can afford and won’t cost your mental health later when you face your reality and try to get out of debt.
● Transport
If you own a car – which is expensive and also costs you fuel money, why don’t you sell it? If you are completely honest with yourself, you can accept that your car is more of a luxury than a necessity – you can definitely do with a smaller car. The average monthly payment for a car in the US costs up $500 a month!
Isn’t that a lot for someone who is struggling to get out of debt? It’s better to sell your car or get a smaller second-hand car. It’s better to spend on public transport that can take you anywhere instead of paying for your car and not being able to go anywhere because you are too afraid to pay for the fuel.
● Credit Cards
The most important lifestyle change you need to adopt is to cut your use of credit cards. In fact, cut up your credit cards, shred them or burn them – just anything that can stop you from using them. You will never, and we mean it, NEVER be able to get out of debt if you keep adding more debt to your account through credit cards. Credit cards will always keep you in the cycle of debt; you will never be able to get them off completely without having more debt standing right in front of you. If you want to get out of debt – get rid of your credit cards in the first place!
● Quit Comparison
Lastly, stop comparing your life with others. This is more of a mindset change than a lifestyle change, but it is very important. Until you compare your life with others, you will keep having to spend more to get what others have – and in the next ten years or so, you will realize how much you have spent on unnecessary things. Everyone has a different life, goals and necessities – no one will give you the money to spend on your things, so why try copying their lifestyle?

4. Start a Side Hustle
In this economy, with impending debt, one job is just not enough – especially after the recent pandemic that has completely changed the economic dynamic of the world, you cannot rely on a job. You need to start finding more work that you can do on the side or on the weekends. This doesn’t mean you have to tire yourself or overwork yourself – don’t forget your health comes first because health is wealth.
But this also doesn’t mean you can waste away your “off days,” spending on parties and club nights. If you have time and energy, try to pick more work that can help you generate kitchen money. Finding part-time jobs that can pay you some extra cash is not that hard in the US. You can consider your skills and find online work such as website designing or coding and work as a freelancer.
Other than you can also work from home, such as selling old clothes, renting out a room on Airbnb or starting a small business from home that you can do and make money on the side. Always remember that working long hours will be tiring and tough, but it will all be worth it when you get out of debt.
5. Make A Repayment Pyramid
Not all debts are equal, and of the same priority, so you need to plan accordingly as to which one you should pay first. Make a plan and establish a hierarchy among your debt to see what you need to pay off first and why. There are many reasons why one must think a certain debt is more important to pay off; for example, your due date for one is nearing, so you need to get rid of It first.
Most financial experts say it is wise to pay high-interest debts first. Because this will help you save up on the overall money you will be spending on paying off interest. So it’s better to place these debts on the top of your debt repayment pyramid when making a financial plan. Make sure non-deductible and low-interest deb come next, and tax-deductible debt comes last on your priority list when trying to get out of debt.
6. Minimum Payment Is Not Enough To Get Out Of Debt

When we make a budget to get out of debt, we often only set aside the minimum amount we need to pay for our debt – well, while it does pay off your debt for that month and helps you hold on for another month – it does keep adding interest and months to come for your debt repayment, which is why it is best to try and pay more than the minimum payment amount.
When you are going through your budget, see how much extra you can pay for your debt. This will keep adding more money to your total debt amount, which not only helps you get out of debt faster than the expected timeline but will also help you save money on interest because the shorter the time, the lesser the overall interest you will have to pay.
7. Use Debt Snowball Method
If you are already paying more than the minimum amount for your repayment, you can also try using the debt snowball method to reduce your overall debt. Basically, the strategy “debt snowball payment” is designed so you can focus on getting out of debt and stay motivated to do so. We know how paying off debts can take years (even lifetimes), and people often lose their motivation to work hard for it – hence motivation component is essential to make sure you strive to get out of debt faster. Hence, the snowball payment strategy helps you pay it off faster and with motivation.
What happens in this method is that you are asked to pay the minimum amount on all your debts except for the smallest one. You should pay just as much as possible for the smallest debt. Now you will “snowball” your payments toward your smallest debt until you can eliminate it quickly. Once your smallest debt is paid off, you can instantly move toward the second smallest or the current smallest debt. Now you will pay the minimum amount for the rest of the debts and snowball your way out of this debt until you eliminate it. This way, you will soon be able to get rid of all your debts one by one.
8. Refinance Your Debt
Paying interest is what makes debt more difficult to pay off, and it takes years for one to get out of the circle. Hence, it’s best to refinance your debt which can help you save up hundreds of dollars on your interests and also pay up your debt faster. You can refinance all the different types of loans, whether they are personal loans, auto loans, mortgages or students.
One way to refinance your debt is to go through a debt consolidation loan – a type of a personal loan with a lower interest rate than your existing debts. Moreover, if you have credit card debt that you need to pay, then you can also consider transferring to a balance transfer card. The balance transfer cards have 0% APR for a short time, such as between 6 to 18 months.
9. Windfalls Are For Debt

Until you are under debt, make sure all your windfalls are for your debt only. You need to be smart with your money and spending; splurging on yourself or saving money in your bank is quite dumb. If you get a tax refund or a stimulus check, make sure you add that money to your loans. You must be hard on yourself and commit your windfalls to your debt.
Even if they are unexpected windfalls such as work bonuses, unexpected windlass, inheritances, and cash gifts – you can use all of this to pay your debt faster. However, if it’s too difficult, you can split it 50-50 or 60-40 between adding to your loan and saving for a future vacation. But do remember that every bit helps when trying to get out of debt – every cent can make it easy or difficult for you.
10. Try Settlement To Get Out Of Debt
When trying to get out of debt, settlement is usually the last resort, but it doesn’t have to be. You can always try to settle for less than you owe – because let’s be fair when it is possible, who likes to willingly pay more? You can call creditors and negotiate with them to come to a settlement on your debt for an amount lesser than what you owe. It is very much possible to do it on your own, but if you want, you can also involve a third-party company or agent who can help you through this process in exchange for a small fee.
However, always remember that the settlement comes with some risk when trying to get out of debt. The Federal Trade Commission has always warned debtors to be aware of the risks of settlements and escaping old debt. For example, the most important risk is that it can sometimes negatively impacts your credit scores.
The Bottom Line
Living with debt is not fun; no matter how you can pretend you are fine, there is always a stressful air around you that keeps sucking you in this loop of figuring out your finances, cutting out on your lifestyle, and still standing in there in front of your bank account with most of your income going back to the bank for paying off loans.
Hence, it is best to start thinking about it and working on your finances to get out of debt. If you want to get out of debt debt, start today. We believe the snowball method or debt relief is the best strategy, so start working toward using this lifeline and getting yourself free from this debt without wasting time!
Thank you for reading!