Steps to Get Out of Debt

Follow this advice to break the habit of overspending once and for all.

Steps to Get Out of Debt
Photo: ISTOCK

Getting into deep debt causes more problems than just financial troubles. The effect on your mental health and relationships can be devastating. Follow this advice to break the habit of overspending once and for all.

Can I undo the damage?
Yes, but it’s not easy. The process of getting out of debt takes time, it can be hard on your ego and your lifestyle, you must be constantly vigilant and it’s easy to revert to old habits. But for those who succeed – and many do – the results are stunning.

Your repair plan
Learn about money management. You can’t master your money if you don’t understand the rules and methods of personal finance. Find a straight­forward book or website and learn all you can about credit cards, budgeting and investing.

Put your credit cards on ice
Literally. Put them in a cup, add water and place it in the back of the freezer so you can’t use them for any impetuous purchases.

Create a budget
How much money is coming in each month? How much are you spending on essentials and how much on frivolous purchases? Then, follow these guidelines to help control your debt.

  • Pay more than the minimum due each month on bills.
  • Pay more than the minimum on your highest-interest credit card. After you pay that off, move to the one with the next highest interest.
  • Automate good money habits. Have your wages paid directly into your account and bills paid automatically from it. Also have small amounts automatically diverted to savings accounts.
  • Find an incentive to cut unnecessary spending: set a goal and post a photo of it where you will see it often.

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