How to Get out of Debt One Dollar at a Time

Debt obligations can be overwhelming for consumers. According to MSN Money, Americans typically carry an average combined balance of $9,100 on two to three credit cards. High-interest debt obligations can be expensive over the long-term. These debts may prevent consumers from pursuing other financial goals, such as saving for a home or socking away more for retirement. Creating a plan for paying off debt one dollar at a time will make this goal more attainable.

Instructions

1

List debt obligations. The first step to getting out of debt is taking inventory of the situation. Gather credit card statements and list the amount owed, interest rate and monthly payment for each obligation.

2

Prioritize debts. Debt obligations with high-interest rates cost more over the life of the loan. Pay these debts off first. List debts with the highest interest rate at the top. After the highest-interest debt is paid, move your way down the list. Make at least the minimum payment on all other debt obligations.

3

Figure out the amount of resources you can devote to debt each month. Make a list of total family income. Subtract expenses from income. The amount left over should be allocated to getting out of debt. If you don't have money left over, it's time to cut expenses. Look at areas such as entertainment and transportation to find extra funds. For example, carpooling with another person to work each day could cut transportation costs in half.

4

Evaluate behavior that led to debt issues. According to MSN Money, it's important to stop using credit cards while paying off debt. If you must charge something, pay off the balance each month. This will prevent additional debt.