How to Get Out of Debt in 12 Steps

Stress, anger, frustration, limited.

Are feelings that are often associated with debt.

The great thing about it though is that you can learn how to get out of debt. You don’t have to live limited, stressed, angry, or frustrated.

You just have to make the step to “GET OUT” by taking action – the right action.

To get out of debt, you need to:

  1. Learn what got you into debt.
  2. Learn why you need to get out of debt
  3. Create a plan to get out of debt
  4. Implement and monitor your plan

So, here we go!


Before you start learning why you need to get out of debt, you first need to know how you got into debt.

It might sound funny, but some people are completely oblivious to how they ended up with so much debt.

If you have credit cards, loans, etc. Take evaluation of how you are using your credit cards and how you are using loans.

This will make you aware of the possible behaviors you may have that may hinder you from getting out of debt.


Before you get out of debt, you need to know why it’s important.

It’s easy to skip this step, if you do you would be doing yourself a huge disservice.


Because you need to understand that by being in debt you’re limited. You’re not free – your debt owns you.

No only that but you have to have a personal why. Why is it that you need to get out of debt?
Maybe it’s because you want to leave a great inheritance to your children and their children, or maybe it’s just so you can be an example of what a great steward over their finances looks like.

Whatever you “why” is use it as motivation to stay the course.

Now moving on to your plan….


Now, it’s time to do some work and create a plan to get out of debt.

Please don’t do what most people do and just read each step and say “ok, got it!”

As you go through each step you should be taking notes and writing down how you plan to tackle each step in DETAIL.

Here’s the 12 step plan for you to get out of debt:

1. Evaluate your Debt. Take inventory of the debt you have. Write down the details and get organized. A great way to do this is to do a quick financial evaluation, you can use this net worth worksheet as your guide.

2. Set a goal with a deadline for when you want to be debt free. There’s a saying that goes something like “ A goal is only a wish until you write it down.” So set a goal and write it down with a deadline for when you plan on being debt free.

3. Make paying off your debt your number one priority. Let’s be honest for a moment. When you trying to save for a big family vacation, buying a house, and paying off debt it will never be done because you’re not really focused. You have to prioritize paying off debt above everything else. This will give you a clear focus and direction while making it easier to say NO to other things.

4. Decide which debt you want to payoff first. You can start by paying off the debt with the highest interest rate first, or choose to pay the smallest debts first to build momentum. It’s totally up to you, so do what’s best for you.

5. Pay the minimum payment on all debt except the debt you’re paying off first. PLEASE don’t stop paying on your debt. It may sound surprising but I have heard of people who stop paying on their debts collectively to just pay down one faster. That’s not a good idea. So make sure you continue paying the minimum on all of your debts EXCEPT for the one you are focused on paying off.

6. Automate your payments. I know many people don’t like automated payments, but it will make the process so much easier. I would recommend setting up a seperate account specifically for bills so that way you can keep your bills and other money separate.

7. Get on a written budget NOW. A budget is simply your guide to financial freedom. It will help you understand exactly where your money is going. Check out this post and spreadsheets.

8. Cut expenses. If you are trying to get your debt paid off fast, then you MUST focus on cutting your expenses as much as possible. This will allow you to put more money on your debt and speed up the process.

9. Earn more money. The more money you have the quicker you can become debt free. So find more ways to make money so you can get out of debt even faster.

10. Put all extra cash towards your debt. If you receive a raise, bonus, or gift, put that extra money onto your debt. Before you know it your debt will be gone.

11. Avoid getting into more debt. Let’s be straight…. If you plan on getting a new car loan or continue to use your credit card you’re wasting your time. That’s why it’s important to know why it’s important that you get out of debt. Because if you don’t have your own personal why or why it’s important to be out of debt then you will always turn to it when you need it.

12. Celebrate small wins along the way. I have a blogging buddy who often says “a win, is a win”. So no matter how small it may seem it’s a win, and progression in the right direction. So celebrate with dinner, or a nice small treat. You deserve it because it’s a marathon not a sprint.

BONUS! Ask for cash. When it’s a holiday or a birthday and you are being asked what you want… tell them cash. It may even be helpful to add in there your reason why you are requesting cash. “ I have a goal to be out of debt in the next two years.” You will be surprised how many people are willing to give even more than they intended because they are helping you achieve a life changing goal.

If you want to get more intense, here’s a couple of resources you can use…


On to the final phase….


Many would say the hard part is over.

Unfortunately, I disagree.

You’re at the final stages now- implementation.

This is where it’s make or break time. Because as you know life happens and anything can happen and knock you right off track.
This is where your personal why becomes your anchor. It keeps you grounded in what you believe. And that should be becoming debt free and how it will change not only your life but your families.

The point is to keep your goal in front of you, commit to it wholeheartedly, and reap the rewards of financial freedom.

This is possible for YOU! You just have to be committed and go all in.

It’s easy to start off motivated initially because you have this idea of how it’s going to be in your head. But when you have to start shutting folks down and staying behind and really SACRIFICING, that motivation will die down, but that’s ok! Stay focused no matter what and keep going.


As people we are faced with enough already. From health issues, to relationship issues, etc. Let’s not make our finances an issue as well. Let’s be smart and proactive and not reactive. Especially if you don’t have that much in debt. Knock it out NOW!

Being on this journey can be hard but I want to be a motivator and incourager any way I possibly can. So, if you need anything, I will do whatever in my power to help. Maybe you fell of track or are just having a bad day. I would love to hear from you.

I am cheering for you!

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