25 Ways to Get Out of Debt

Are you up to your eyeballs in debt? Can you barely keep afloat in the ocean of debt that you have accumulated? Is struggling to pay off your loans making it hard to focus on the things in life that really matter? If so, then you’re no doubt wondering how you can get out of debt – and do it fast.

The twenty-five methods, tips, and strategies discussed below, which range from setting up a budget plan to talking with a credit counselor to seeking a debt settlement, show you how to do this. While reviewing them and hopefully putting them into action, remember that the only real way to get out of debt – once and for all – is to not rack up anymore.

With that said, here are twenty-five of the best methods/strategies that can help you get out of debt:

Table of Contents

Jump Directly to One Strategy – or read them all!

1. Stop Increasing Your Debt 2. Record Your Spending
3. Obtain a Copy of Your Credit Report 4. Calculate Your Total Debt
5. Set Up a Budget Plan 6. Cut Down Your Monthly Expenses
7. Talk About Your Debt With Someone You Trust 8. Consider Talking to a Financial Advisor
9. Understand Your Different Debts 10. Prioritize Your Debts/Creditors
11. Determine How Much You Can Pay 12. Set Realistic Goals
13. Make a Debt Payment Plan 14. Use a Debt Repayment Calculator
15. Start Paying Off Your Debts 16. Ask For a Lower Interest Rate
17. Consider Debt Consolidation 18. Consider Debt Reduction
19. Consider Debt Negotiation 20. Consider Debt Management
21. Consider Debt Settlement 22. Find a Reliable and Reputable Company
23. Consider Bankruptcy as a Last Resort 24. Try to Earn More
25. Join a Support Group

1. Stop Increasing Your Debt

If you really want to get out of debt, then the very first thing that you need to do is stop increasing your debt. Sure, it might seem obvious (and it really is) but many people don’t take note of the obvious or attempt to change their ways. The easiest way to get your debt situation under control is to refrain from adding to it. Stop spending when it isn’t necessary. Don’t take any more loans out. And cut those credit cards in half if you can’t help but use them. Only when you are sure that you can stop increasing and adding to your current debt, should you continue on and employ the other strategies discussed on this list.

A good rule of thumb is to hold onto only one credit card for emergency situations. Carry cash with you the rest of the time so that you aren’t tempted to charge to a card. Doing this will also help you keep better track of your spendings. 

2. Record Your Spending

record your spending

Record Your Spending

After you set yourself a goal not to increase your debt anymore, you are ready to move onto step number two: recording your spending. By keeping track of the ‘what, when, where, and why’ of your spending habits, you can figure out where your money is going and in what areas you can cut back spending on. Many people toy with the idea of keeping track of their spending but eventually discard it because they find it useless, tedious, or annoying. A lot of the same people doubt that such a small, seemingly meaningless strategy can amount to any real changes. However, when you consider that most people (probably you yourself as well) fall into debt in stages – by spending, borrowing, or charging little trickles of money at a time, rather than by making one grand money-swallowing purchase – the idea that keeping track of all your purchases can help reduce debt starts to make more sense.

It is generally recommended by most debt experts that you record your spending for at least a month in full. This will help you find out where your money is going and help you track your spending. Be sure to record every cent you spend – yes, every cent – during this first month to unleash the full effectiveness of this tip.

3. Obtain a Copy of Your Credit Report

In addition to not increasing your debt and recording every cent that you spend, it is also essential that you obtain a copy of your credit report. Understanding your report is vital in your quest to get out of debt and will also help you figure out the logistics of your individual debts. All of your financial obligations (read: debts) from major institutions will be shown on your credit report. When used alongside other documents such as recent statements from your creditors, a credit report will help you calculate your total debt (see the next step, step four, for more on this).

There are many ways that you can go about getting your credit report. In fact, every citizen is allowed to access their credit report one time per year without charge as per the Fair and Accurate Credit Transactions Act (FACTA). About.com’s credit report scoring  page offers a thorough breakdown of a handful of the most popular ways to access your individual credit report.   

4. Calculate Your Total Debt

calculate total debt

Calculate Your Total Debt Amount

Reviewing your spending records, credit report, and recent statements from creditors should give you all the tools that you need to calculate your total debt by yourself. Rather than viewing each of your individual debts on its own all of the time, it is important to understand them as a whole as well, so that you know exactly how much you owe overall. Doing these things will help you set up a budget plan, adjust your expenses, and finally start paying off your debts in an effective order.

A great way to calculate your total debt is to write down (or type down) each debt on a piece of paper (or in a computer document). Include the name of each creditor, the amount that you owe each, the monthly payment amount, and the related interest rate. The list will help you get a feel for your debts as a cohesive whole while still making it easy to view each one individually. 

5. Set Up a Budget Plan

The first four debt reduction methods on this list all add up to step number five: setting up a budget plan. A budget plan is absolutely essential to anyone struggling with their finances, whether debt or otherwise related, as it can help you track your spending habits and help you save money in both the short and long term. Both your spending records and debt calculations will be a big part of setting up your budget plan. Your budget plan should include all of your monthly expenses (such as rent, utilities, food, gas, and other bills). The point of setting up a budget plan is to set yourself a spending limit for each month and to figure out exactly how much you have left over to use towards your debt payments.

Dummies.com, the online home of the popular “For Dummies” informational books, has a great article on setting up a budget plan. If you are unsure of how exactly a budget plan works or how to set up your own, then this resource will help cut down on your confusion.

cut monthly expenses

Cut Monthly Expenses

6. Cut Down Your Monthly Expenses

This step consists of figuring out a way to spend less on your monthly expenses than you were in the past. At the very least, you need to make sure that you don’t require more money to live off of than you make each month. In other words, your monthly income should cover all of your expenses (and then some). Ideally, you will have a little extra money left over at the end of each month to put towards your debt payments.

It can be a great idea to cut down on your monthly expenses by categorizing your spending. This consists of breaking your expenses into groups like “must haves,” “should haves,” and “like to haves.” If possible, cut out some of the “like to haves” and possibly some of the “should haves” from your monthly expenses. No one is telling you to cut out all of the “extras” or “entertainment,” just that those are the areas you should look at reducing first. Section 3 of the wikiHow article on getting out of debt provides more information on categorizing your spending. 

7. Talk About Your Debt With Someone You Trust

Debt isn’t something that you need to, or even should, attempt to go at alone, especially if you have been struggling with it for some time. Even just talking about it with someone you trust, a friend, family member, or coworker, can help. Their suggestions, advice, and plain-old support are invaluable to your debt reduction success.

You probably know, however, that talking about debt is not always easy. It can be an embarrassing and emotional topic. This article on talking to your partner about credit card debt offers up some great tips that will help you talk about it with your significant other, or anyone else for that matter. 

8. Consider Talking to a Financial Advisor

consider an advisor

Consider an Advisor

Though talking with someone that you trust about your debt can be a great way to gain emotional support, it sometimes doesn’t result in any tangible benefits. That’s where a credit counselor or a financial advisor comes into the picture. Credit counselors are experts that are trained in debt relief and they can use this knowledge and experience to give you tips and guidance on your path to a debt free life. They will be able to help you through the entire process and even offer you recommendations and suggestions for debt reduction programs.

It is of utmost importance that you find a reliable credit counselor or credit counseling agency if you end up seeking this type of help. Project Debt Relief’s credit counseling tag has all sorts of related information ranging from choosing the right credit counseling service to avoiding credit counseling scams.

9. Understand Your Different Debts

At this point, you probably have your debts organized (and their total amounts calculated) as well as an understanding of your monthly expenses. The next step on the path to debt elimination is thoroughly understanding each one of your debts. This tip ties in with finding a credit counselor as they can help you understand the differences between each one. A big part of understanding the differences between types of debt is understanding the difference between good debt and bad debt. Good debt is debt with a low interest rate. An interest rate under 10% is generally considered low. Bad debt is debt with a high interest rate. Anything over 10% is generally considered high. When prioritizing the order in which you should pay off each debt (see the next tip, tip number ten), it is important to take good debt and bad debt into consideration.


Wikipedia’s debt page actually has a very thorough (if slightly wordy) breakdown on the various types of personal debts.

10. Prioritize Your Debts/Creditors

prioritize debts

Prioritize Your Debts

By now, you should have a fairly detailed and comprehensive understanding of your debts and finances. The next step is prioritizing your debts/creditors. What this means is basically deciding on an order in which to pay off your different debts. As mentioned above, it is best to start with the highest interest debts (or bad debts) first. On the other hand, some people prefer to pay off their smaller debts first, especially if their higher interest debts also have higher balances. This allows them to eliminate the bulk of their individual debts first before focusing on the one with the highest balance.

About.com’s article on prioritizing your creditors offers up several key points of advice on this important piece of the debt relief puzzle. 

11. Determine How Much You Can Pay

After you have prioritized the order in which to pay your debts, it is time to determine how much money you can actually put towards their payment each month. Obviously, this is yet another area where tracking your expenses and having a budget plan can come in handy. Figure out how much you can spend on debts each month while still living comfortably and making sure that you don’t fall even deeper into debt.

A good rule of thumb is to only pay how much you know you can pay. No more, no less. This does mean, however, that you should also keep a ‘buffer’ or ‘barrier’ of sorts on your expenses. Make sure that you leave yourself a little extra, even after debt payments, to take care of any emergency expenses that might arise.

set goals

Set Realistic Goals

12. Set Realistic Goals

While determining how much you can pay on your debts, be sure to only make realistic goals. Unrealistic goals will only discourage you when you fail to meet them. In many ways, it is better to start with a small goal that you know you can meet – say a smaller monthly payment amount – and then increase your goal (and thus your payment amount) once you are in a comfortable payment routine.

Talking to a credit counselor or looking into setting realistic debt goals online are both good ways to figure out what other people in similar situations as you are doing. It can also help you figure out exactly what a realistic debt payment goal for yourself might be. 

13. Make a Debt Payment Plan

Along with setting realistic goals, you should make a debt payment plan. While the two tips are quite similar, making a debt payment plan differs in that it helps you get your plan down in writing. This step allows you to put two and two together, to put your expenses, your debt priorities, and your payments into a single package. It can also beneficial to contact your creditors to inform them of your plan of action.

To learn more about making your own debt payment plan, visit Fool.com for their ’60 second’ getting out of debt web article. It acts as a very informative resource for those looking to set up a debt payment plan. 

14. Use a Debt Repayment Calculator

A debt repayment calculator is another invaluable tool when you are struggling to get out of debt. A calculator can help you set realistic goals and figure out a debt plan. These calculators are not only a way to find out how much you owe and how quickly you can pay it off, they are also a form of motivation. For instance, the debt repayment calculator provided by You Can Deal With It can help you find out how much money and time you can save in the long run simply by increasing the amount that you pay each month. Much of the savings have to do with lower interest rates but actually just seeing how much you can save if you stick to your debt plan can make it seem all the more worthwhile.

Project Debt Relief’s debt repayment calculator is another excellent way to keep up with your current payment plan.  

15. Start Paying Off Your Debts

Yes, I know (!) it’s taken us a long time to get to this point but sooner or later you’re going to have to just start paying off your debts. In fact, it is the only way to actually get rid of your debts once and for all. While the fourteen tips discussed before this can all help make the process easier and more effective, there is no getting away from the fact that you’re just going to have to start paying off your debts eventually. However, it is important to remember to stick to your plan and make your payments each and every month. It is also a very effective strategy to look at your finances, expenses, and payments every month or two to see if you could potentially be safely making larger payments. The quicker you can pay off your debts, the better.

Though there are a lot of websites offering debt repayment tips, the simple fact of the matter is that your debts won’t disappear until you pay them off. While there are some helpful techniques that you can employ in your quest to reduce your debts, everything starts with actually setting money aside (and sending it in). 

16. Ask For a Lower Interest Rate

get lower interest rates

Lower Your Interest Rates

If you still find that it is difficult to pay off your debts even with a budget and debt payment plan, there are still several things that you can do to get back on track. The absolute best of these – when it works – is to ask your creditors for a lower interest rate. Target one of your debts with a high interest rate – say, one that charges more than 14% – and call up the associated creditor. Ask to have your rate reduced – from 14% to 10% or 11%. By telling them that you’d like to stick with their company and do the right thing. If you do this, you might just find them willing to cut you a little slack.

Finding lower interest rates for your debts is generally easiest when it comes to credit card debts. Because credit card companies are business oriented, and don’t want you using another company in place of theirs, they will be most likely to grant you a lower interest rate. However, you should still be prepared to be made very uncomfortable when you call. The company is not going to lower your interest rates without a debate, but you’ll find that if you keep at it and are persuasive, there is a good chance that it will be reduced.

17. Consider Debt Consolidation

Sometimes, even when you’re trying your best and remain diligent throughout the entire process, paying off your debts the traditional way – by setting up a budget plan, cutting down your expenses, and making regular debt payments – just doesn’t work as it should. There are many reasons for this though one of the most common is that you just have too many debt payments to make and not enough money to make them with. If this sounds like you, then you might want to consider debt consolidation. This method of debt repayment can make your payments easier to make by lumping each individual payment into a single unified payment. At the same time that this makes it easier to keep them organized (since there will be one due date and one payment amount per month), it can also help give your debts a lower interest rate as a whole, thus erasing the abovementioned ‘bad’ debt stigma.

Most people need the help of a debt relief company to attack debt consolidation. Before seeking out such a company, using a debt consolidation calculator (such as this one from Wells Fargo) will give you a better idea as to whether debt consolidation really is the best strategy for you. 

18. Consider Debt Reduction

Reduce Your Debt

Reduce Your Debt

One of the most popular debt relief strategies around, debt reduction is a loan-based form of debt relief that aims to help those with multiple bad debts, those loans with high interest rates and a number of different lenders. Debt reduction basically works by moving the repayment balance from your high interest loans to a single low interest rate loan. This method generally works best for credit card debt and oftentimes moves debt from credit card to credit card. Debt reduction can keep your debts from growing while you are attempting to make payments and thus help you keep the entire problem under control.

Like debt consolidation, debt reduction should only be tackled with the help of a professional advisor or debt relief company. Check out this article on debt reduction programs found on the Project Debt Relief blog for more information.

19. Consider Debt Negotiation

Yet another top-of-the-line debt relief strategy is debt negotiation. Debt negotiation, like the two strategies discussed previously, is another method of debt reduction in which the help of a debt professional is required. In a simple sense, a debt negotiator helps you repay your loans by talking with your creditors for you. They attempt to reach an agreement that both you (the borrower) and they (the lender) find agreeable. In many cases, you can even negotiate to have the total debt that you are required to repay reduced. Creditors end up agreeing to this because they want to at least get some of their money back rather than none at all.

Debt negotiation, and debt negotiators, can help you with your debt problem in many ways. It is worth researching these ways on your own time before visiting with one. Project Debt Relief’s debt negotiators page has plenty of information on these benefits.

manage your debt

Manage Your Debt

20. Consider Debt Management

In many ways, the three debt relief strategies discussed above, debt consolidation, debt reduction, and debt negotiation, are all debt management strategies. However, debt management can also stand by itself as a strategy of its own. Debt management, when you get down to its bones, is simply a formal agreement that is reached between you and your creditors. The agreement might refer to reduced interest rates on your debts or even lower payments altogether. Most debt management agreements also state clear terms, including required amounts for monthly payments.

A debt management plan is quite similar to debt negotiation, especially because it involves dealing directly with your creditors. Once again, it is a debt relief strategy that, more often than not, requires the guidance of a professional or an organization.

21. Consider Debt Settlement

Though not all debts are eligible for debt settlement (finding out if yours are is yet another reason to see a credit counselor), it can be a very effective and successful strategy in many instances. It consists of coming to an agreement with your creditors to only repay a small (oftentimes a very, very small) amount of your total debt instead of resorting to bankruptcy. Most people see debt settlement as a last line of action against their debt problem as it has both positive and negative effects. The positive side of it is that it gets you out of debt. It settles your debts and erases them. The flip side to this, the negative side, is that it puts a reasonably tarnishing mark on your credit report, a mark that can make it hard to take out loans or new lines of credit for many years into the future.

Don’t consider debt settlement until you have exhausted all of your other options. For more information on its specifics, this article on what is debt settlement offers a great place to start your research.

22. Find a Reliable and Reputable Company

trust

Find A Company You Trust

Though this tip is slightly out of order on this list, it is pertinent to the last five tips (seventeen – twenty-one) and the next tip (twenty-three). Shoot, working with a reliable and reputable company – a company that isn’t trying to scam you and is honestly trying to help you – is of the greatest importance whenever you are seeking professional help. Finding such a company to work with will ensure that you are getting your money’s worth and that your debt problem will be solved quickly and efficiently.

There are many different ways to find a reliable and reputable debt relief company. However, the Better Business Bureau is always a top-notch place to begin your research.

23. Consider Bankruptcy as a Last Resort

Ah, bankruptcy. It is a term that is often casually tossed around but that is feared by most people, not least of all because it will leave a long-lasting scar on your credit report and your finances in general. But sometimes bankruptcy really is your only option, especially when you have exhausted all of the other ways to get out of debt. If you have, and your debt is still suffocating you, then filing for bankruptcy might be your last resort.

Before filing for bankruptcy you need to find out if you can actually file for bankruptcy. The answer to whether or not you can is quite complex, in reality, and depends on your personal situation, the nature of your actual debts, and the type of bankruptcy that you would like to file for.

Earn More

Earn More To Cut Debt!

24. Try to Earn More

Though this tip and the one following it (tip number twenty-five) are not necessarily in order, they are invaluable tips that need to be thrown out there anyway. Furthermore, they can be used at any stage of the debt repayment process, whether that is when you’re making your initial budget plan or considering debt consolidation. This tip – trying to earn more money – is straightforward. Simply put, if you can figure out how to make more money while keeping your expenses the same, then this extra cash can be used to pay off your debts quicker. Obviously, making more money isn’t easy, but it can be done. In fact, it can be done quite easily by picking up small jobs just to make a few extra bucks here and there (you need to think small, we’re not talking about making big money).

Walking neighborhood dogs, babysitting for friends, and even doing yard work on the weekends are all great ways to make extra money. You might even be able to find an early morning route dropping off newspapers or an evening janitorial job a few times per week. The Internet also provides a number of money-making opportunities. Just be sure to use whatever extra cash you earn explicitly for your debt payments and not for anything else. 

25. Join a Support Group

Last but not least, you can join a support group to help you with your debt related problems. Many people actually have an ‘addiction’ of sorts to taking out new loans and racking up debt. This is especially true of people who frequently overspend on their credit cards. Sometimes the support and advice of others who are struggling with similar problems can help in a big way. If you have tried again and again to erase your debt with no success, then you should definitely consider joining a debt support group.

Debtors anonymous is one of the best places to start if you are interested in joining a support group. Their web page shows you how and where you can get involved and also provides a number of invaluable resources to those struggling with their debts.

At the end of the day (and, yes, this has been mentioned time and time again), actually paying off your debt is the only way to ever get out of it. However, the twenty-five tips, methods, and strategies discussed above should give you the firm footholds that you need to get out of debt (and do it faster) and get on with your life.

Do You Have a Debt Relief Strategy Not Listed Here? Let Us Know In The Comments!

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