Woman working on budgets to help with debt

10 Steps on How to Get Out of Debt

Debt can be a heavy burden to carry. It can cause you to have less money for your day-to-day expenses, and it is hard on your mental health as well. If you are struggling with debt, then these 10 ideas can help you get out of debt faster!

Table of contents:

    Create a Budget and Stick to It

    It may seem simple, but the first step in getting out of debt is creating a budget. A budget will give you spending limits for each category (e.g., groceries), so that you can track how much money is going towards your debts or other items on your list.

     

    Make More Money

    If you need more income or are looking for ways to make your current salary stretch further, there are some changes you could make in your work life to help. One option is looking into other sources of income that can supplement your current salary, like increased hours, overtime or applying for benefits.

     

    Find Out What You Owe

    The first order of business when you’re trying to get out of debt is figuring out how much money you owe. You may be surprised at what exactly is included in your total, especially if you have been using credit cards and accumulating a balance from interest charges over time!

     

    Get Rid of Your Credit Cards

    You should eliminate the use of credit cards from your life as much as possible. This will stop yourself from accumulating more debt and help keep you on track with a budget.

     

    Reduce the Number of Debt Payments

    Using a Debt Consolidation Loan or a Debt Management Plan can reduce your monthly payments and combine your debts together into an affordable plan.  It is important to look into the advantages and disadvantages of this type of option before making a commitment.*

     

    Consider Consulting a Financial Advisor

    Working with an expert might be the last thing you want to do when you’re trying to get out of debt, but it’s worth considering if your financial situation is serious or complicated. Working with a Financial Advisor will help keep you on track and give you the necessary support that can be hard for some people to find elsewhere!

     

    Consider Debt Settlement

    If after following all of the steps in this list you still owe more than what is being paid off by your monthly payments, then debt settlement may be a good option! Debt settlement involves negotiating with your creditors to pay less than what’s owed and can help speed up that process of getting out of debt.

     

    Pay Off Your Highest Interest Rate Debt

    The next step to getting out of debt is figuring out what your highest interest rate debt is. This will help you prioritise where to put the most money each month so that it can be paid off as soon as possible!

     

    Consider a Second Job

    If none of these options are giving you the financial freedom from debt that you’re looking for, then a second job could be just what you need. This will allow for more income to go towards your debt payments and help get out of debt faster!

     

    Stick With It!

    No matter how many steps in this list seem too difficult or time-consuming, if the process is worth it to you then stick with it. The faster you get out of debt, the better!

    So next time you’re feeling the pressure of financial stress, remember that there are many ways to get out of debt and it doesn’t have to be complicated or difficult. From a budget and getting rid of your credit cards, these steps will help.

    *Failure to make the full contractual repayment may affect your credit score and lead to the creditor taking enforcement action.