How to Get Out of Debt

Debt can feel really stressful.

But you can change that!

By views on debt have changed over the years, and I’m so proud of that.

If you really want to get out of debt (and feel better about the debt you have), listen to this podcast: Debt Mindset Podcast

To get out of debt, you need to:

  1. Learn why you need to get out of debt
  2. Create a plan to get out of debt (12 steps — see below)
  3. Implement and monitor your plan

So, let’s get started!


FIRST: Learn Why You Need to Get Out of Debt

Before you get out of debt, you need to know why it’s important.

It’s easy to skip this step but that would be a huge mistake.

You need to understand that by being in debt you are a “slave to the lender” as they say. You’re not free — your debt owns you.

There is power and fulfillment in freedom. And you can’t have that if you’re in debt.

Here’s a look at some resources that will help you learn more about why it’s so important that you get out of debt.


  • Read [easyazon_link identifier=”0785289089″ locale=”US” tag=”financegirl05-20″]The Total Money Makeover: A Proven Plan for Financial Fitness[/easyazon_link] by Dave Ramsey
  • Read [easyazon_link identifier=”0060763280″ locale=”US” tag=”financegirl05-20″]Secrets of the Millionaire Mind[/easyazon_link] by T. Harv Eker

Okay, moving on to your plan…


SECOND: Create a Plan to Get Out of Debt

Now, it’s time for you to create a plan to get out of debt.

Here’s the 12 step plan for you to get out of debt:

  1. Evaluate your debt. Take inventory of the debt you have. Write down the details and get organized.
  2. Set a goal with a deadline for when you want to be debt free. Set a hard deadline for when you plan on being debt free. This will make the goal an actual goal and not a wish.
  3. Make paying off your debt your number one priority. Prioritize paying off debt above everything else. Give yourself daily reminders that this is your focus. It will make saying no to thing easier, which you’ll ultimately have to do because you can’t do everything. Make debt repayment your number one priority.
  4. Decide which debt you want to payoff first. Choose either the highest interest rate debt, or choose the smallest debt to repay first. It’s up to you, do whichever makes you feel better.
  5. Pay the minimum payment on all debt except the debt you’re paying off first. Make sure you only pay the minimum payment on all your debts except the debt that you’re focused on paying off first. Pay as much extra to that one debt.
  6. Automate your payments. Automating your debt repayment will make the process easier for you because you won’t have to choose whether to spend the money on something else — it will happen automatically. This is a hack that can help you achieve your goal – don’t underestimate it.
  7. Get on a written budget. A budget will help you understand exactly where your money is going each and every month. This is really important when you’re focusing on getting out of debt. Grab these budget spreadsheets to get started.
  8. Cut expenses. To get out of debt faster, focus on cutting your expenses as much as possible. This will allow you to put more money onto your debt and speed up the process.
  9. Earn more money. Find ways to make more money so you can get out of debt even faster. Get seriously intense about increasing your income in the name of your debt (that’s what I do for my student loans)!
  10. Put all windfalls toward your debt. Decide ahead of time that you will put extra money on your debt. If you receive a bonus, a raise, or a gift, put that extra money onto your debt. This will really help decrease your debt even faster than you expected.
  11. Avoid getting into more debt. While you’re getting out of debt it’s really important that you don’t get into more debt. That’s why I recommend knowing why it’s important to get out of debt before you start your plan. If you don’t address the underlying problem, then it will happen again. For example, if this debt is credit card debt, stop using credit cards. You know what’s the wise choice for you, so listen to your gut.
  12. Celebrate small wins along the way. As you put your plan into action, celebrate small wins along the way. Go out to dinner, or buy yourself a small treat — whatever it is that will help you feel celebrated for your success. It’s important to remember that you’re doing a good job and this is a marathon, not a sprint.

This 12-step process of how to get out of debt is enough for you to make the change.

If you want to “double down” and get more intense, here’s a couple resources you can use…


On to the final phase of this process…


THIRD: Implement and Monitor Your Plan

You’re at the final stages now — implementation.

Over time, life happens — things change. So, you need to monitor your plan.

I recommend having budget meetings and checking in every so often (I prefer weekly, but you can decide if monthly or some other interval is better). During these meetings review everything in your plan in detail.

The point is to keep your goal in front of you, commit to it wholeheartedly, and reap the rewards of financial freedom.

This is possible for you! You just have to go all in.

Here’s a few more resources to help you…


It’s easy to feel motivated initially to get out of debt, but the road can be long and tiring. Keep yourself motivated. Give yourself rewards for small wins. Stay focused and no matter what, keep going.


A Final Note!

When you’re in debt, you’re a “slave to the lender”. You have given up part of your freedom.

The best thing you can do to change this is to learn how to get out of debt.

I’ve laid out a 12-step action plan for you to get out of debt above.

The process takes time. Like Dave Ramsey says, “get mad at your debt”. You can do it if you put your mind to it.

I am cheering for you!