💸 Your Step-by-Step Plan to Get Out of Debt—Starting Now
- dlchatman
- Jan 1
- 3 min read
Getting out of debt isn’t about shame—it’s about taking back control of your money and your peace of mind. Whether you’re juggling credit cards, personal loans, or overdue bills, this plan will help you build momentum and finally break free.
✅ Step 1: Get Real About Your Debt
Before you can tackle debt, you need a clear picture of what you’re dealing with. Make a list of:
Each debt (credit cards, personal loans, medical bills, etc.)
Balances
Minimum monthly payments
Interest rates
💰 Step 2: Build a Starter Emergency Fund
Before aggressively paying off debt, set aside $500–$1,000 as a starter emergency fund. This protects you from going further into debt when unexpected expenses pop up.
You can do this quickly by:
Selling unused items
Picking up a short-term side hustle
Cutting non-essential expenses for a month
🧮 Step 3: Choose a Payoff Method That Motivates You
You have two proven options:
🔥 Debt Snowball (Best for Motivation)
Pay off the smallest debt first (regardless of interest)
Gain momentum as each debt disappears
Great for emotional wins and staying on track
💡 Debt Avalanche (Best for Saving Money)
Pay off the highest-interest debt first
Save more on interest over time
Takes longer to feel a “win,” but is financially efficient
Pick the method that keeps you most motivated—and stick with it.
📅 Step 4: Create a Realistic, Written Budget
You can’t pay off debt without knowing where your money is going. Build a budget that covers:
Essentials (rent, food, transportation)
Minimum debt payments
A fixed extra amount to throw at your top-priority debt
Use free budgeting tools like:
🚫 Step 5: Cut Spending (Temporarily!)
To free up extra money to crush debt faster:
Cancel or pause unused subscriptions
Eat at home more often
Delay non-urgent purchases
Limit impulse buys with a 24-hour rule
Even saving $100–$300/month can dramatically speed up your payoff timeline.
💼 Step 6: Increase Your Income
Paying off debt is way faster when you earn more. Ideas include:
Freelance or gig work (Uber, TaskRabbit, tutoring, etc.)
Selling unused items online
Asking for overtime or a raise
Monetizing a hobby or side hustle
🎯 Apply 100% of this extra income toward debt.
💳 Step 7: Stop Using Credit—For Now
Avoid digging a deeper hole while climbing out. That means:
Hiding or locking credit cards
Removing cards from mobile wallets and online stores
Only using debit or cash while on your debt journey
📈 Step 8: Track Progress Monthly
Celebrate small wins. Watch balances shrink and stay motivated by:
Creating a visual chart (e.g., coloring in a debt thermometer)
Updating your spreadsheet or app regularly
Sharing your goals with an accountability partner
🤝 Step 9: Get Support & Stay Consistent
Debt freedom is a marathon, not a sprint. Stay inspired by:
Following debt-free communities on Instagram or YouTube
Listening to podcasts like The Dave Ramsey Show or Frugal Friends
Working with a financial advisor or coach (especially for large or complicated debt)
📩 Need personalized help? Reach out to our trusted partner Leo Barros, CFA at Raymond James for guidance and support with your financial journey.
🚀 Final Thoughts
You can get out of debt—and you don’t have to wait until next year or next month to start. Every extra dollar you throw at debt is a step toward freedom, confidence, and financial peace.
Take the first step today. Your future is worth it.
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