How to Get Out of Debt Legitimately

Paying off debt is frustrating. Oftentimes, when you start making progress, an unexpected expense will land you in the red again. According to the Federal Trade Commission (FTC), if you struggle with debt management, you aren't alone. Getting out of debt takes time. There isn't a quick fix that makes debt disappear overnight. However, creating a long-term plan to pay off debt can help.

Instructions

1

Take inventory of your debt obligations. Gather recent credit card statements and make a list of all debt obligations. The total might be shocking, but it's important to have a grand total for debt obligations.

2

Create a repayment plan. Don't get overwhelmed by the large number. List all debt obligations, from the highest interest to the lowest. Circle the highest-interest debt. This will be the first debt that you focus on repaying. Make minimum payments on all other bills. Focus solely on the highest-interest debt until it's paid off. Then, focus on the next-highest interest rate.

3

Find extra funds to pay down debt. Small purchases add up over time. Make a list of daily unnecessary expenses. Cutting out a daily latt purchase could free up $100 or more each month. Putting this money toward debt will help you pay the debt off quicker. Also, consider riding the bus to work or carpooling to save on transportation costs.

4

Make an action plan for behavioral changes. Brainstorm how you got into debt. For some people, it's impulse purchases. For others, it's expensive housing or other rising costs. Create an action plan to change behaviors. For example, if you struggle with impulse purchases, freeze your credit cards. If you really want to use the cards, you'll have to wait for them to thaw. This will prevent overspending in the future.