How To Get Out of Debt: 5 Simple Steps You Can Start Today

Living with debt can make it harder to manage your money and plan for the future. Even when you’re making the regular payments, progress can feel slow, and it can be hard to see the finish line — especially when interest charges keep adding up. Whether you’re working to pay down a credit card balance, pay off student loans or tackle an auto loan, it’s normal to feel a little overwhelmed.

Debt can make it harder to budget and plan for your financial future. However, getting out of debt is possible, and it starts by making a plan that works for you.

How to Get Out of Debt

1. Assess your current debt

Before you can create a plan to pay off debt, you need to create a clear picture of what you owe. Start by listing all your current debts — include credit card debt, student loans, personal loans, auto loans and any other outstanding debts.

This can help you understand which debts are costing you the most and which ones you might want to tackle first. It also gives you a sense of your overall debt load, so you can track progress as you pay things down.

Remember to include:

• Type of debt (credit card, car loan, etc.)
• Total amount owed
• Interest rate
• Minimum payments
• Payment due date

2. Make a budget

A budget can be a really useful tool when it comes to debt repayment. It helps you see where your money is going and where you can make adjustments. Start by tracking your income and expenses — including fixed costs like rent and variable ones like groceries or gas. Once you know your monthly cash flow, you can allocate a portion specifically for extra debt payments.

Budgeting doesn’t mean cutting out everything you enjoy. It just means being intentional about how you use your money so you can free up funds to put toward your financial goals.

3. Choose a debt repayment strategy

There’s more than one way to pay down debt — the key is picking a method that matches your goals and keeps you motivated. Two of the most common approaches are the debt snowball and debt avalanche methods.

Debt snowball. The debt snowball method focuses on paying off your smallest balance first. You’ll put a little extra toward this debt until it is paid off. Then you add what you were paying for the first debt and start putting it toward the next smallest debt. This approach is all about quick wins and building momentum as you go.

Debt avalanche. The debt avalanche method targets the balance with the highest interest rate first. You’ll save more money in the long run by reducing the total amount of interest you pay, even if it takes longer to see progress upfront.

4. Consider debt consolidation

If you’re juggling multiple high-interest debts, debt consolidation might help simplify your payments and possibly lower your interest rate. This involves combining several debts into one new loan — often a personal loan.

Benefits of debt consolidation may include:

• A single monthly payment instead of several
• A potentially lower interest rate
• A clearer path to becoming debt-free

Debt consolidation may not be the best fit for everyone. Be sure to compare offers from different lenders, understand the terms of any debt consolidation loan, and confirm that the total repayment cost makes sense for your budget.

5. Investigate other options

If your debt feels unmanageable, don’t give up — there are still options.

• Negotiate with lenders or credit card companies. Some may offer reduced interest rates, waived fees or alternative repayment plans.
• Look for ways to increase your income. A side hustle, part-time job or freelance work can help you make extra money to speed up your debt payoff.
• Get professional help. A certified credit counseling agency can help you create a debt management plan and negotiate with creditors. Keep in mind this option may come with fees, even if it’s through a nonprofit provider.
• Research debt settlement programs carefully. These can reduce what you owe, but often come with risks — including credit score impacts and potential fees. If you go this route, make sure you’re working with reputable providers, and avoid any service that promises fast debt relief with no downsides.

What are some ways you can stop taking on more debt?

If you’re focused on paying down debt, the last thing you want is to accidentally add more. Here are a few simple ways to set up guardrails and keep your progress on track.

Stick to your budget

A budget isn’t something you set and forget. Check in with your plan weekly, especially if your income or expenses change. Prioritize needs over wants, and keep your financial goals front and center.

Track your spending

Knowing where your money goes is the first step to changing habits. Just pick a method that works for you:

• Use a notebook, spreadsheet or budgeting app
• Review your statements for overlooked charges or subscriptions
• Look for spending patterns that don’t align with your goals

Remove credit cards from e-wallets

Adding a little bit of friction when it comes to online shopping or using tap-to-pay can help. Try removing saved cards from:

• Digital wallets like Apple Pay or Google Pay
• One-click checkout options on sites like Amazon
• Browsers or apps that auto-fill payment info

Pause before major purchases

Give yourself a 24-hour window before buying non-essentials. This simple pause can help you avoid impulse purchases that can lead to more debt.

Unsubscribe from promotional emails and shopping apps

Retailers are good at tempting you to spend. Removing those triggers from your inbox or phone can help you avoid buying things you don’t need.

Make credit less accessible

Consider lowering your credit card limit or locking your card temporarily. Some card issuers let you pause your card in the app — a helpful option if you’re trying to avoid temptation without canceling it completely.

Why is paying off debt so important?

Paying off debt isn’t just about improving your credit score — it’s about creating space in your budget and peace in your life. Here’s what you gain when you prioritize debt reduction:

• Save money on interest payments, late fees and penalties
• Free up income for savings, emergencies and future plans
• Improve your credit history and overall credit score
• Reduce financial stress and feel more in control

No matter where you’re starting, every payment is a step toward a more stable financial future.

DISCLAIMER: This content is for informational purposes only and should not be considered financial, investment, tax or legal advice.