How to Get out of Debt


Everyone, at some point if not for a major part of their life, has had some debt to settle. When you say you are in debt, it could be in these three forms: (a) you borrowed any amount of cash and did not put up any collateral, (b) you had some credit extended to you, and (c) you made use of some service but did not pay it the moment you used it. Add on the number of obligations you failed to settle on its due date and you will find that you actually have a long list of debts. But do not worry. Incurring debts does not have to be a problem, as long as you acknowledge them and start a plan on how to rid yourself of them. So for those who want to get out of debt, here are ways you can go about:

Assess your financial situation

Budgeting is one of the most tedious things everyone has to do. Worst if you are actually in over your head in debt. Then budgeting becomes even more difficult. But the first step to getting out of debt is to acknowledge all your payables, both future payables (for loans, fixed payables) and past payables (unsettled accountabilities). List them down so you have a good gauge of your financial situation.

stack of coins

Analyze the way you spend money

Once you have an idea of your actual accountabilities, it would be good to start assessing your spending habits. Ask yourself how you got that financial fix. Did you enjoy too many cups at Starbucks? Are you shopping too much? An easy way to assess your spending habits would be by scanning your credit card bills. That would give you a good idea as to where you spend your money. If there are a lot of unnecessary things, such as too many trips to the mall during a sale or too many dinners out with the husband, then it might be time to cut down on those as they actually come out to a lot once you add them all up.

Have a paradigm shift

One of the main reasons why people get into debt is because of the way they handle money. There is always a reason for spending that extra money that could be placed in a savings account. You had a bad day at work! You fought with your wife! All those are mere excuses for spending. Do not use money as a way to change to your mood. Your situation will turn around whether or not to buy that pretty dress at Zara. So rather than feel that you are entitled to treating yourself, remember that money is best kept for rainy days, especially if you are buying unnecessary things.

Change the way you spend money

Debt is not the end of the world, neither is it a way of life. Well at least it does not need to be, unless you allow it. But the only way you will be able to change your situation is to change the way you spend money. Stop swiping your credit card, especially if you know that you have not been able to settle your dues for the past months. Refrain yourself from getting your usual daily fix at Starbucks. Expensive coffee is not a necessity. Put aside that money to pay off some bills. It might not seem like a lot. But if you add up all the cups of coffee you drink at Starbucks and the clothes you have bought on sale, you would probably have enough to pay off a chunk of your debt.

woman with shopping bags

Remember that in order to experience a significant change in your life, something has got to give. You cannot hold on to your old habits and ways and expect something to change. For you to get out of debt, you will need to instill some discipline in yourself. There will definitely be some sacrifice entailed as you have been used to a certain way of life. But if you stick to your guns and decide that you clearly want to make a change in your finances, then hold on to that thought and you will definitely be on your way to financial freedom.

Photo attribution:

1st image – Stuart Miles / (

2nd image – anankkml / (

3rd image – stockimages / (