Getting out of debt usually isn’t about one “hack”—it’s about building a simple system: know what you owe, free up cash flow, pick a payoff method, and keep momentum. Here’s a practical roadmap you can follow whether you’re dealing with credit cards, loans, or a mix of both.
1) Take inventory of every debt you owe
Before you choose a strategy, write down everything—credit cards, personal loans, auto, student loans, medical bills, and anything else with a balance.
For each debt, record:
- Balance
- Interest rate (APR)
- Minimum payment
- Due date
- Status (current, late, in collections)
If you’re unsure what all exists (especially older accounts), checking your credit report can help you spot debts you forgot about or accounts in collections.
2) Adjust your budget to create “debt payoff money”
Debt payoff needs fuel: cash you can reliably put toward balances each month. A common starting framework is the 50/30/20 approach—essentials, discretionary, and savings/debt payoff—then tweak it so more goes toward debt if you’re trying to accelerate.
Fast ways people free up money:
- Cut or pause low-value subscriptions
- Reduce dining/entertainment temporarily
- Renegotiate or shop around for recurring bills
- Set spending caps on categories that routinely blow up the plan
3) Pick a debt repayment strategy (and commit to it)
The “best” strategy is the one you’ll follow consistently. Two common methods:
Debt snowball (smallest balance first)
You pay minimums on everything, then throw extra money at the smallest balance first—rolling that payment to the next debt once it’s cleared.
Debt avalanche (highest interest first)
You pay minimums on everything, then target the highest APR first to reduce total interest cost over time.
Either way, the core rule is the same: minimums on all debts, extra on one target debt.
4) If you’re behind, contact creditors early
If you’re missing payments or about to, reaching out can sometimes lead to a revised payment plan or short-term relief options that help you get current again.
5) Look for additional income (even short-term)
If budget cuts aren’t enough, increasing income can speed up payoff dramatically—extra shifts, gig work, freelancing, or selling items you don’t need. Even a temporary income boost can create real momentum if you direct it straight to the target debt.
6) Consider credit counseling if you need structure
If you’re overwhelmed, a reputable credit counseling approach can help you build a plan, understand options, and stay organized—especially if high-interest cards are driving the problem.
7) Consolidation can help, but only in the right scenario
Debt consolidation can make sense if it:
- lowers your interest rate and/or
- makes payments simpler (one payment instead of many)
But it works best when you also stop adding new debt, otherwise balances can rebound.
8) Don’t ignore collections
If you have debts in collections, include them in your inventory and plan. They can affect your financial picture and may require a different approach than current accounts.
9) Stay accountable so you don’t drift
Progress happens when your plan becomes routine:
- Track balances monthly
- Celebrate milestones (first card paid off, first $1,000 reduced, etc.)
- Use reminders or a simple spreadsheet so you don’t rely on willpower alone
A quick “Debt Exit” checklist
- List all debts + APR + minimum + due date
- Create monthly “extra payment” room in your budget
- Choose snowball or avalanche and stick with it
- Add income if payoff money is too small
- Consider counseling/consolidation if needed