How to Get Out of Debt Fast: 7 Effective Steps to Get Your Debt Off Your Back

Debt2Riches > Eliminate Debt > How to Get Out of Debt Fast: 7 Effective Steps to Get Your Debt Off Your Back
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Are you searching for ways to get out of debt fast? Many of us are drowning in debt and have lost hope that we will ever be able to get rid of our debt. Debt has become a great burden to many people and causes a lot of stress and financial hardship. For those of you with a low income and with no money, I’m sure you’re wondering what steps to take to get out of debt.

So How Do I get out of Debt Fast?

To get out of debt fast, you will need to have a specific plan in place to help eliminate your debt efficiently. I will provide you with 7 effective steps that you can use to get your debt off your back right now. Please follow these steps to help you tackle your debt head on.

Step #1: Make a Budget to Identify Your Debt

The first step is to create a budget so that you know exactly how much debt you have. Having a budget is a critical step. You need to identify what your income sources are and what debts you owe. 

You will never be able to make good process getting out of debt fast if you have no idea what debts you have. If you need help creating a budget, please refer to my article about getting a free excel monthly budget template to get you started with your budget.

Step #2: Reduce Your Monthly Spending

The second step is to identify ways that you can reduce your spending, so that you have more money available to pay down your debts. For this you will need to refer to your budget to figure out where you are spending your money each month and what spending you can realistically reduce. 

One thing that causes people to spend a lot of money is eating out at restaurants and fast food. That spending can really add up. Try to significantly reduce eating out and you will find  a decent amount of upfront money that you can put towards your debts. This does require consistent discipline.

Step #3: Stop using Your Credit Cards

The third step is to immediately stop using your credit cards. Consistently putting a balance on your credit cards or even maxing out the balance each month really hurts your ability to pay off debt. Credit cards are a back breaker when it comes to paying off debt. High credit card balances mean that you are paying a lot of interest each month. When you make the minimum credit card payment, it’s possible that most of your payment may be going to pay the interest. It is a snowball effect that can make it very discouraging to try to pay down.

If you find yourself constantly using your credit cards, then you need to seriously review your finances to see why you are relying on credit cards so much. This is a red flag that you need to make a change in your spending habits. One of the easiest ways to stop using credit cards is to simply hide your credit card or cancel the credit card. This is something that you will need to decide for yourself.

Step #4: Pay off High Interest Credit Cards and Bills First

The fourth step is to focus your attention on paying off high interest credit cards and bills first. This allows you to save money that you would otherwise be paying in interest. You can use the money you save to pay off your debt.

To make this happen, you need to first find out what your interest rates are on your credit cards. You can do this by looking at your monthly statement or even calling your credit card company. You need this information so you can devise a plan to pay off your credit cards and other bills that are charging you interest.

Once you have identified the highest interest bill, then make a commitment to pay off that credit card or bill. Do not revert back to spending more on it.

Step #5: Pay more than the Minimum Payment

The fifth step is to pay more than the minimum payment on whatever debt you are tackling first. This allows you to save interest and pay off the debt faster. 

Many people just pay the minimum payment because it is easy and feels us with a sense that we are paying our bills. However, the debtor wants you to only payment the minimum. This ensures that the debtor will be collecting the maximum amount of interest from you, and paying more interest hurts your debt relief efforts. 

To stop this cycle, you need to pay more than the minimum payment each month. You will need to decide what amount makes sense, but try to pay as much as possible. The more you can pay, the faster that debt will be eliminated. Plus, you will see your efforts rewarded by seeing your balance going down faster.

Step #6: Use the Snowball Method to Pay off Debts

The sixth step is that once you have paid off a debt, take the money you were paying towards that debt, and apply it towards debt number two. Continue this process for each successive debt you pay off. This is a great way to quickly pay off debt much faster. You are paying more and more on each debt. It truly is a snowball effect and will help give you hope that there is light at the end of the tunnel. Debt relief is possible!

As an example, say that you have 4 debts. 

The first debt the minimum is $200.

The second debt the minimum is $150.

The third debt the minimum is $175.

The fourth debt the minimum is $225.

On the first debt you decide you are going to pay $300 per month. Eventually you pay off that debt. 

Now you have $300 per month extra to put towards debt number two. You are now paying $450 a month towards debt number two. That debt will be paid off quickly. 

After debt number two is paid off, you now have $450 per month extra to put towards debt number three. Debt number three will disappear quickly too. 

After debt number three is paid off, you now have $625 per month extra to put towards debt number four. You are now paying close to three times the minimum payment for debt number four. This debt will be eliminated very quickly.

Do you see how that works? This method is very effective. The hard part is just getting started paying more on debt number one and being consistent.

Step #7: Get a Part Time Job

The seventh step is to get a part time job. 

I know. I can hear you sigh.

Getting another job is not fun or glamorous, but it can give you an income boost that you can use to pay off your debts faster.

Even though working two jobs is not fun, the extra money that you make is well worth the effort if you are putting it directly towards paying off your debt. This will allow you to pay significantly more than the minimum payment on your credit cards and bills.

Remember that you will not have to work the second job forever, it will be temporary. You can get rid of it when you see fit.

One of the easiest part time jobs for you to consider getting may be a retail job in the evening or some other similar job. Even though it may be hard, it will be worth it.

Take Action Now!

– Brian

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