How to Get Out of Debt

How to Get Out of Debt

Arggghhhh…. Let’s crush that debt!

This is the ultimate blog post about how to get out of debt. You know it’s the ultimate because we put a picture of Arnold Schwarzenegger right at the top. And Sylvester Stallone is in there too for good measure.

So… now that we’re in serious butt-kicking mode, let’s get started.

This blog post will tell you all the important steps to help you get out of debt. It is intended to be comprehensive – in other words, it has all the information you need in order to get out of debt ASAP. You can scroll through it and read the sections that are relevant for you or read it straight through in one sitting… like Arnold would do.

If you’re wondering why I’m an expert on this subject… Well, I paid off my own credit card debt earlier this year and it taught me a lot. Below, I’ll share my best tips on how to pay off your debt and reach the promised land of financial freedom.

Here are all the things we’re going to cover below:

1. How to REALLY stick to a budget
2. How to save money
3. How to EARN more income
4. Behaviors that will help you get out of debt
5. How to pay off credit card debt
6. How to pay off student loan debt

Now let’s dive in…

How to REALLY Stick to a Budget to Get Out of Debt

This is the most important thing to do and also the most challenging thing to do! Why is it so challenging? Well, here are a few reasons:

1. You want to keep up with the Joneses
2. Your animal instinct prefers short-term gain over long-term gain
3. You may not have enough income

For now, let’s focus on #1 and #2. It’s easy to get caught up in a spending mentality. After all, most of the messages we see in the media – TV, magazines, online, etc. – are telling us to spend more and that we will only be happy if we have the latest gadgets and most fashionable shoes. When we see those around us enjoying these luxuries, we naturally want to enjoy them too. And that’s how you get sucked in!

Car debt

Yes, this is a luxury!

Because really, when you think about it, these things ARE luxuries. We don’t have a right to own an iPad or a new pair of jeans. And in many cases, the fact is these things don’t make us happier. Sure, we may get a brief adrenaline rush from buying something but our overall level of happiness is not changed. In fact, in some cases, by focusing more on enjoying the things we already have and not coveting things we don’t have, we can raise our baseline level of happiness.

So what should we do? First you need to start a budget if you don’t have one already. How? Start by deciding how much you want to spend in total each month. Look back at your expenses for the previous month and set a reasonable goal based on what you spent on things like groceries, car insurance, rent, etc. If you don’t already have a budgeting spreadsheet, you can use ours. For more explanation on using a budget spreadsheet, check out this article.

Now, once you have a budget in place, how do you make sure you STICK TO IT?

You need to make your commitment very clear. You do that by writing down your budget goal (i.e. the amount you plan to spend each month) and stick that number on the fridge as well as on your desk at work and anywhere else you spend a lot of time.

At the same time, set up automatic deposits from your paycheck that will go directly to paying off your debt. By directing this money to your debt immediately you will avoid any possibility that you spend it before the month is over. Taking these actions now will constrain your behavior so you will not succumb to the short-term temptations that we discussed above.

“You lose the opportunity to see how much you can save without tracking purchases and seeing how far your money can go before it runs out.” –Steve Stewart, MoneyPlanSOS

How to Save Money to Help You Get Out of Debt

Arnold says you should budget

Arnold says to cut unnecessary spending

It might be easier than you think to save money. This needs to be a huge component of your get out of debt plan.

I’d recommend focusing on your monthly expenses first, because you can quickly reduce your monthly spending with just a few minor changes. Do you have a lot of debt? Then it’s time to make some drastic changes:

Save money on food: If you’re like me, you probably eat at restaurants more than you need to. I used to eat out for lunch all the time, usually someplace near my office. But I’ve learned that if I plan ahead I can get ingredients on the weekend to make lunch during the week. Things like pasta, sandwiches, and stir fry are great for taking as homemade lunches. Read more ideas here.

Save money on your car: If you are trying to pay down a mountain of debt, then you need to get rid of your car payment if possible. Consider trading down to a used vehicle that you can get much more cheaply (like a 10-year old Toyota or Honda that will last awhile). Read more on how to save money on car expenses.

Save money on entertainment: You probably don’t need cable television as much as you think you do. These days, there are a ton of options available for getting TV shows and movies, including Hulu, Netflix, etc. Switching to one of these free or lower-cost alternatives can make a dent in your monthly budget. There are also some great ideas for fun things to do for free. Read this article for additional ideas.

Save money on fashion/clothes: When you’re paying off debt, you simply can’t afford to have the latest fashions and trendiest clothes. Instead, look for great deals at thrift stores or discount racks – or simply use the clothes you already have. Read more about this here.

Finally, you can use our Budgeting Tips resource center to find new ways of saving money. Before you know it, you’ll be on your way to drastically reducing your monthly expenses!

“By gradually making a change in your life, you are more likely to succeed in the long term.” –Sean Bryant, OneSmartDollar

How to Earn More Income To Get Out of Debt Faster

Earn more money

More of this always helps, right?

One of the best ways to speed up your debt repayment is by making extra money on the side.

Even if you increase your monthly income by 5% it could make a remarkable difference in how fast you pay off your debt. But how to make more money?

Here are a few ways:

Do freelance work: If you have the ability to write well, design or draw, crunch numbers, or anything else, you can make money as a freelancer. There are some great sites now that make it easy to find freelance work, such as,, etc. Sometimes you can dedicate just a few hours a week and make up to a hundred dollars or more.

Do some tutoring: If you live in an area with a college or high school (you probably do) then there may be students nearby who need tutoring in various subjects. As long as you feel comfortable in one of those subjects, this could be a great opportunity to earn some cash on the side.

Sell things you don’t need: It’s one of the realities of modern life that we all seem to have lots of junk we don’t need. Why not sell it on eBay or Craigslist and get some money in return that you can use to pay off your debt faster. I tried this and found that it’s easier than you might think.

If you want more tips on all this stuff, it may be a good idea to sign up for our Zero Debt Action Plan. It’s a 9-week guide that is completely free and is geared toward helping you pay off debt through earning more income and reducing expenses.

“Want to get to $1,000 quicker? Consider selling some things you don’t use anymore and stashing that money.” –Philip Taylor, PTMoney

Behaviors that Will Help You Get Out of Debt

Friends can help you get out of debt

Moral support for getting out of debt

Okay, now you’re ready to get out of debt. But it can be difficult to know exactly how to get out of debt. There have to be some secret tips to make your progress faster and your goal more attainable, right?

Well, yes. We recommend that you need to take some concrete actions in order to help you reach your goal:

Make a deadline: As with budgeting, you need to give yourself a very tangible goal and a deadline in order to motivate yourself to get out of debt. Write down your deadline and post it in places you’ll see it regularly.

Be realistic and stay positive: Although a deadline is helpful, you don’t want to make a deadline that is unreachable or one that will make you feel that success is impossible. Your goal should be ambitious but reachable. It’s important to feel the thrill of success as you take the small steps toward your final destination. That’s why you must stay positive.

Spend time with like-minded people: During this time (while you are paying off debt) you should rely on encouragement and support from friends and family members – especially those who have a frugal mindset and who are either not in debt or who are similarly trying to pay their debt off. By spending time with these people, your commitment to your goals will be reinforced.

For more specific advice, read the sections below on how to tackle each different type of debt that’s out there! (You may also like this post on the 5 different ways to pay off debt)

“One of the most important things I did was celebrate the small wins. Even if it was just finding the courage to keep going, I rewarded myself in a small way.” –Carrie Smith, CarefulCents

How to Get Out of Debt (for Credit Cards)

Credit card statement shock

Don’t let your credit card statement shock you!

As I mentioned above, I paid off my own credit card and wrote about it on our blog. It was a difficult thing to do, but ultimately it was very satisfying journey. When I started I had $3,000 in credit card debt, so I know how it feels to see those balances on your statement every month.

It’s not fun.

But don’t worry, you can pay off debt faster than you imagine. You want to start by evaluating your interest rates. It’s always a good idea to start by calling your credit card company to see if they will lower your interest rate (often they will!) The average credit card interest rate is usually around 15% but many go up as high as 25-30%. If yours is pretty high, then you should consider immediately transferring that debt somehow. You could do a balance transfer, which might have a 0% interest rate for the first 12 months, or you could do a debt consolidation loan which would have a much lower interest rate.

However, you need to be very careful when selecting balance transfer cards or debt consolidation loans. Why? Because the devil is in the details. To find out how to avoid getting scammed in this, read our post that explains what debt consolidation is.

If a balance transfer or consolidation loan is not appropriate for you and you just need to start paying down your balance(s) as fast as possible, then you need to start by organizing your debts and making sure you pay the one with the highest interest first. To understand why, read our article about which credit card to pay off first. (And check out our resource center for Credit Card Debt)

“Negotiating a lower rate on your credit card isn’t always going to be successful, but if it is you could save thousands in interest, depending on what rates you receive and for how long.” –Peter Anderson, BibleMoneyMatters

How to Get Out of Debt (for Student Loans)

Ready to pay off student loans

Ready to pay off student loan debt!

Do you have student loan debt? If you do, you’re certainly not alone. There are millions of people in the U.S. who have student loan debt, and the total amount of student loan debt is growing every year.

So how do you pay it off? You use the techniques discussed in the paragraphs above, but with a few key insights.

For example, many people don’t know about opportunities like the Public Service Loan Forgiveness Program, which allows those who work in non-profit or public service jobs such as the military (Army, Navy, Air Force, Marines, etc.) or school teachers to have their loan balances forgiven entirely.

You should also be aware of programs like the Income Based Repayment program, which will allow you to pay less than your regular monthly payment if you are struggling to earn enough income. On the other hand if you want to pay off your student loans faster try using biweekly payments.

With student loans, you need to know who your lender is and how much you owe (for those who have federal loans, you can find that information here). Also, our Student Loan Debt resource center can help you find more tips that relate specifically to your situation.

“Having debt means paying interest. Unfortunately, that means you get to use less of the money that you earn.” –Anna Newell Jones, AndThenWeSaved

How to Pay Off Other Kinds of Debt

Mortgage debt

It’s possible to pay off all types of debt

Obviously, there are many other kinds of debt, including mortgage debt, car loan debt, IRS debt, and medical debt. Here are some tips related to those specific types of debt:

Car Loan Debt: If you already have a car loan and feel like you have too much debt, it may be wise to consider selling it and buying a used car (with cash) instead. Of course, that depends on your ability to tap into savings, which may not be possible if you’re already struggling with other forms of debt. In that case, your best bet is to start planning for how you can pay off your car loan or trade it for something cheaper as soon as possible.

In the meantime, you can reduce the monthly cost of driving your car by (A) finding a carpool/bus/train/bike that will get you to work instead of driving your car, (B) being more conscious about avoiding unnecessary trips around town, and (C) renegotiating your auto insurance rates given the reduced miles you’ll be driving now. For more, read this article.

Mortgage Debt: This type of debt can be a bit tricky. In some cases, having a mortgage is considered (rightly) an investment. In other cases, the house might be underwater and you may be looking for an escape route. That makes it difficult to give specific advice.

However, in general it’s safe to say that if your mortgage payment feels like it’s crushing you or if you don’t think your house will ever recover enough value to make it worth your monthly payments, then it makes sense to get out and allow for more room in your budget to pay off other debts if necessary. On the other hand, if you’re looking to pay off your mortgage faster, look into doing biweekly payments. And of course, if you are thinking about buying a house, make your decision carefully.

IRS Debt: If you owe tax money to the IRS, the first thing you must be sure to do is get it set up on an installment plan. This will at least ensure you are not penalized for lack of payment or late payment. You can also research their hardship programs and see if those might apply to you. Learn more here.

Medical Debt: If you accrued medical debt recently, it’s a good idea to carefully check each line item you were billed for to make sure the charges are accurate. Unsurprisingly, medical billing errors are very common, and I bet you don’t want to end up paying for something you don’t actually owe! Second, you should ask about any partial forgiveness programs that may apply to you. And third, get the payments set up on a payment plan so they’ll be manageable. Read this article for more tips.

Hopefully these tips help you!

“I’ve been consistently bringing in a little more than we need to live this entire year so far, so now anything OVER that amount will go directly to our mortgages.” –J. Money, BudgetsAreSexy


Arnold Schwarzenegger

Until next time…

Now you know how to get out of debt! Keep on reading our blog (you can subscribe here) because we are going to drill down into each of these topics more thoroughly on a weekly basis. You will NOT want to miss it. You’ll be on your way to the promised land of financial freedom.

So bookmark, subscribe, whatever you want to do, and be sure to follow up with us later.

Because… We’ll be back!

P.S. Have you tried ReadyForZero yet? Go try it! Seriously, it’s free.

Get offers for lower-interest rate debt consolidation loans here on ReadyForZero!
Check your rate using ReadyForZero's free debt consolidation tool. People have saved thousands by consolidating higher-interest debts using a single, personal loan, this will not negatively impact your credit. Check Your Rate Now

Image 1 credit: Gage Skidmore; Image 2 credit: || UggBoy♥UggGirl; Image 3 credit: Gage Skidmore; Image 4 credit: Philip Taylor PT; Image 5 credit: laRuth; Image 6 credit: xJason.Rogersx; Image 7 credit: Auburn Alumni Association; Image 8 credit: Teemu008; Image 9 credit: Gage Skidmore

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  • Great post. I really like Seans quote, so many people fail to realise that a small change can bring about vastly different outcomes.

    • Thanks, Glen! I completely agree with that idea too. It’s amazing how powerful small changes can be.

  • TB at BlueCollarWorkman

    You missed Chuck Norris. 🙂 You pretty much covered it all. Now peopel just have to DO IT!!

    • Good one – maybe I’ll use Chuck Norris for the next one! Haha. Thanks, TB!

  • This is one of the best posts I have seen in a while. Awesome job Ben.

    • Wow, thank you so much Grayson! I really appreciate that. So glad to hear that you liked it.

  • Excellent post! Congrats on paying off your debt!!

    • Thank you! It was a great feeling when I finally paid off my debt. Now I’m working to build up my savings and emergency fund.

  • surayabay

    “Quick, somebody call “Dionne Warwick”!

  • surayabay

    “Is it me, or does “Sly” look like he let “Joan Rivers” plastic surgeon, Dr. Stealth Slicemen, give him a face-lift”?

    • babydoc

      Sly and Arnold both!

  • I don’t see where you address the biggest money suckers, child care, insurance (that would be medical, I can’t afford to own a car) and the all the medical costs the insurance doesn’t cover. And we are generally healthy but the insurance that is affordable doesn’t cover much.

    • Hi Winifred, you’re absolutely right. Child care and health insurance premiums (plus other medical costs) are a huge part of many families’ costs. While this particular article didn’t mention these, we have written about them before. For example, one article that I think you might like is this one on negotiating medical bills: Let us know if you want to see more specific articles about these topics!

  • Al

    Here’s a thought. For those of use who are young and healthy. no big family. if you have a health insurance that you are paying like 80-300 a month. put that on the side for your medical visit. figure this out, let say you are paying a premium of 150.00 per month for almost 3yrs at 36 month = $5400.00 already spent to find out that you have to pay a deductible of 80.00 plus medication? and the doctors visit actually cost 150.00 for 1x? who is cheating who. save your money and use it wisely. when you get sick you will have it to cover you. Also pay down does credit cards. look at community college to save on basic classes that cost 3x more at regular colleges. cust down on cable. if you don’t watch too much tv or have kids. and all the latest pc/smartphone/tablet. will be 3x cheaper if you wait or free. Patience is the key.. thats what my grandparents did.

  • Trevor Ricks

    Hey there is great stuff here. I like your style of writing, it makes for an interesting read, and you bring up a lot of useful points. I like the idea of surrounding yourself with others who will encourage you to get out of debt. That’s a new and good point.

    • Hey Trevor, thanks so much! I’m glad to hear you liked the post and I hope you’ll come back and read more of our posts in the future.

  • debtoutofhere

    Credit card debt is the easiest of debt to get free of.

    Step 1. Stop paying the bank.
    Step 2. Let the bank default you.
    Step 3. Let a debt collector buy the debt.

    You now owe the bank $0, so you are debt free. It IS that simple.
    Once a debt collector “buys” a debt it is discharged by the original creditor (the bank) so you owe the bank nothing and no debt exists. The debt collector just paid it off for you.

    As you have no contract with the debt collector to pay them should they do this, you are under no obligation to pay the debt collector a single cent… legally.

    All you need to know is what to say to the debt collector, how to say it and what to ask that they provide.

    You only pay credit card debt if you WANT to.

    • Keep in mind that if you follow those three steps, your credit score will be greatly damaged. If you don’t need your credit score, maybe that’s not a concern to you, but for many people a credit score is important because it determines things like whether you can buy a house, rent an apartment, get a job, etc.

      • debtoutofhere

        Hey Ben, that is true to a point yes I agree.

        However, only a “paid default” will be recorded (by the bank) on the credit score. As the debt collector cannot record anything on the credit score (no contractual authority to do so) you have nothing to worry about with them. If they do you can charge them under the FDCPA for $1,000 for each offense. A simple verify or remove notice to them will have this done in a flash if you make the terms of failure say $100,000.

        Your credit score can be improved in as little as a week for the paid default. Besides, the credit score is only a measure of how good you are at being in debt. The higher your credit score the better you are at being a debt slave. A high credit score is nothing to lust over. Break the mind control. Debt and credit is not a good thing.

        There is always an answer to every situation, paying a debt that’s not yours is just one of them. Have a poor credit score and need an apartment, then get a guarantor. Need to get a job, find one that doesn’t employ your credit score but employs you.

        None of this is difficult to a thinking mind.

    • Teri

      I like this idea. However, how much debt are you talking about? I think having 50k worth of credit card debt would ensure the bank to sue for their monies wouldn’t they? It seems tooooo easy to walk away from! As for credit scores you’re right with debt and no credit for as long as however, at this point screw having credit. I’ve made it for years on end now so wth…

  • Great idea bout getting out of debts. This is really useful post!

    • Regine, thanks so much! I’m really glad you found the post useful. I hope you’ll continue reading our blog and let us know what you think.

  • Very impressive article. You can get rid off your debt by cutting your spending. You have to create a budget plan for the future use. You should only purchase the necessary things and don’t waste your money on un wanted and luxury things. Try to adopt a simple life style. Don’t drink coffee daily in restaurant. You can also try to earn additional income through working online. This will support your debt recovery process.

    • Thanks! I’m glad you liked the article. And what you say is true – creating a budget and limiting your spending is a huge part of paying off your debt.

  • Confused

    Hi, I have a question and can’t seem to find the answer. I had to let two cars go back because my kids couldn’t pay for them. They were in mine and my husbands names. I also have a few collections. I also have 12 credit cards (between me and my husband) that have been closed by the creditor. Will it do me any good to pay the monthly payments on the 12 credit cards if I already have collections and two repos? Will I be wasting my time and money? I don’t plan on paying on the repo balances nor the collections so just trying to figure out if I will be throwing my money away by paying on the 12 credit cards. Thank you so much for your advice!

  • Deepika Sharma

    Great information.Paying high interest rates on existing debt causes your debt to really mount up, and makes paying it off much more difficult. If possible, you want to lower those interest rates.

  • Felipe Jaramillo


    My name is Felipe Jaramillo. I write articles for different websites that offer services related to debt relief/settlement/counseling. Today I’m reaching out to likeminded websites to share a recently created educational written article/infographic about debt, penned by me.

    If you’re open to the idea, please reply to this message with an email ( and I’ll send you the article and the infographic.

    Looking forward to your response,

    Felipe Jaramillo.

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