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There are few things quite as liberating as getting out of debt after having beenget out of debt
in the negative for a while. Millions of Americans are facing an uphill battle — but almost anyone be debt-free with a few tried and true steps.

In this article, we’re going to walk through the steps that will allow you to get out of debt. Instead of a long, drawn-out process that takes forever before you see results, these methods are ready to be put into action immediately. That means you can be debt-free sooner rather than later!

How to get out of debt: Money strategies that work

Money expert Clark Howard has helped American consumers get out of debt for more than two decades with his sage financial advice. He says that when it comes to being debt-free, you first need a plan in place.

“You can’t get out of debt until you have a road map to do it,” he says. “So the first thing you have to do is figure out where every dollar is going and what of that you can reduce so that you free up the money to pay on your debts.”

1. Figure out where your money is going

How to get out of debt as quickly as possible

First, you have to look at your overall finances. What’s your income? Where is all of that money going?

The key to figuring out where every dollar is spent is to create a list or inventory that shows all of your bills and credit card accounts. Make sure you include the interest rates for each card.

In creating a list that shows your interest rates from highest to lowest, you can clearly see which credit card you need to pay first: the one with the highest interest rate!

Here are two questions that Clark says you need to ask yourself at this stage:

  • What’s my income?
  • What am I spending on a monthly basis?

You can use a notebook or a spreadsheet, but you need to write this down. Answering these two questions is crucial to reconciling in your mind what the steps are for you to become financially solvent again. This is the first step toward creating a budget.

2. Calculate your debt

How to get out of debt as quickly as possible

Once you take a good, hard look at how much money you’re bringing in and how much you owe, your debt-to-income ratio will be crystal clear. Clark says that’s when it’s time to make a key decision to get out of debt.

“Then you come up with a plan based on the debt you have,” he says.

This is not a rhetorical exercise: You need to literally write down a timetable that shows “how many months or years it will take to pay it off and much that’ll be per month that you’re going to have to pay,” Clark says.

3. Set a goal

How to get out of debt as quickly as possible

Next, you need to come up with a goal: Because everyone’s financial journey is different, your goals will vary. The key to it all is to be realistic. The last thing you need to do is to set a super-stringent benchmark that deprives you of basic meals and necessities.

Clark says goals are so important because without them, there’s no accountability.

“It’s like when someone says, ‘You know, I really should be saving money,’ and they’re guilt-tripping themselves. Let’s say that they make enough money and they should be saving money, but they’re not: They’re not going to change their behavior unless they have a goal. So you have to set a goal.”

So you have a roadmap to get out of debt: What’s next?

Once you’ve got your road map in place, you’ll need to employ some cost-cutting strategies that will actually allow you to reach your goal sooner.

4. Get help with your debt

At this point, you might be overwhelmed with what you’ve learned about your situation so far. It’s time to step back.

Don’t think for a second that you’re sinking in debt all alone. Millions of Americans face a similar situation.

If you’re struggling to pay off your debts, contact the Consumer Credit Counseling Service. The organization offers free credit counseling and a debt management service for a small monthly fee depending on the state. Visit to find a CCCS office near you.

5. Transfer your credit card balances

The next step is to see if you can reduce the amount you’re paying to your creditors.

When it comes to your credit cards, hopefully you’re paying at least the minimum amounts due each month and not skipping any payments. If you don’t do those two things, you’re likely to be saddled with even higher interest rates.

One reason your payments may be so high is because you’re paying hefty interest charges. To reduce them, take advantage of credit cards with low introductory rates. The key is to pay it off (or do a balance transfer) before the rate expires.

6. Sell your old stuff online

Once you’ve taken care of that, look for ways to earn extra money.

Who says you have to have a garage to have a garage sale? The largest marketplaces are online, so what better way to sell your old items? Look around your house, in the attic or basement and gather what you don’t need. Today there are scores of websites that let you upload items to sell.

Here are some resources to help you sell your stuff for the most cash:

7. Boost your income

At the same time, see if you can put your skills and time to work to boost your income.

To help you line your pockets, here’s a list of easy ways to make extra money each month.

If you can’t find a way to make some supplemental income from selling your old items or picking up odd work, you may want to look for a job that pays more money.

Freshen up that resume and apply for a second job. It could even be a temporary job just to get some more money rolling in. Once you’ve climbed yourself out of the financial hole, you may be in a better position to pay your debts.

8. Start an emergency savings fund

Finally, it’s time to start thinking about what you would do if the economy goes south or you run into unexpected expenses.

The #1 way to recession-proof your life is to have an emergency fund or, as Clark likes to call it, an “oops” fund.

“If you don’t have savings then you’re not prepared for the ‘oops’ in life,” he says. “Because oops happen. All different types, sizes, and a lot of times we’re not in a position.”

RELATED: How to start building your emergency savings now

Clark says the numbers show that if you’re not saving — even a small amount — the risk of financial ruin is much higher. Put something away — even if it’s $10 every pay period — so that it will grow over time.

Final thought

Nobody likes to think about debt, even if it sometimes keeps us awake at night. Debt is not going to go away by itself, so facing it sooner rather than later is vital to your peace of mind. Follow the steps and suggestions above and you could find yourself in the debt-free club before you know it!


This article originally published on by Craig Johnson and Charis Brown

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