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10 Step Program For Getting Out of Debt

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I have been in debt since I was 18 in some way, shape or form. I have always wanted to get out of it, but always had a hard time figuring out how to start. Finally, 16th months ago, I started. I am almost done, and my method worked!

Here is my 10 step program to getting out of debt.

I wish I could say I made this up, but I didn’t. There are a ton of experts who I read and listened to, and they shaped what I am writing here. If you are like me and you feel like you just don’t know how to begin, this program is designed to give you a guide of sorts. Of course you should tailor it to fit your needs.

This is not so much for people who have a couple of cards and are lazy about paying them off. It’s for those of you who have trouble finding any extra money to pay off debts, who seem to find themselves getting deeper and deeper into debt, and don’t know how to stop it. It’s for those of you who have reached bottom like I did.

Please keep in mind: I’m not a financial advisor. I am someone who was deep in debt and through hard work I will have dug myself out in a few months. This program is based on my experiences, and on the large number of books and websites I’ve read.

It’s best to do only one of these steps per week. Really focus on each step, and take the week to internalize the steps and even read up on each subject more.

You Only Do This Once’s 10-Step Debt Payoff Program.

  1. Look in the mirror. Look in the mirror and say to yourself, “I have a problem with debt. I got into this because I spend money I don’t have. But I believe that there’s a way out, and I can do this. I can control my spending, make a plan, and slowly get out of debt.” That’s huge; just admit you have a problem. Now set aside just 30-60 minutes a week to deal with your finances — make it a set day and time, and don’t let yourself miss this appointment.
  2. What’s essential?. Make a list of what you spend. Take out some statements and write down the stuff you charge. If you have a major problem with credit cards, cut them up NOW. You know what’s essential; your bills, housing, auto, gas, groceries, etc. Non-essential? Clothing, CDs, DVDs, books, magazines, gadgets … the list may go on. For the next 30 days, you are going to try and go without this stuff. Just try..
  3. Start an emergency fund. Save this for week three: set up a savings account for an emergency fund. If you have one, skip this step. Chuck every cent you can toward this emergency fund savings account until you get to $1000. It’s important that before you start paying off debt, you have at least a small emergency fund. Aim for $1,000 at first, and you can grow that later. The reason: if unexpected expenses come up (and they will), and you don’t have an emergency fund, you will skip your debt payments to pay for the unexpected expenses. Create this fund with all your might as quickly as you can.
  4. List your debts. This part sucks, and you are going to be afraid to do it. But you need to do this, and you can. Set up a simple spreadsheet. In one column, list all of your debts — credit cards, medical bills, auto loan, etc. You can leave out your mortgage, but put everything else. In the second column, put the amounts you owe for each debt. In the third, put the minimum monthly payment, and put the percentage interest in the fourth column. Total up the second and third columns to see your total debt owed and how much you have to pay, at a minimum, towards debt each month. There are many apps you can use for this as well.
  5. Create a budget. This can be a rough step as well, but it’s not as bad as you think. Set up another simple spreadsheet. In one column, list your monthly bills (rent or mortgage, auto payment, utilities, cable, etc.) — everything that is a regular monthly expense. Then list variable expenses (things that change every month) like groceries, gas, eating out, etc. Later you should add irregular expenses (stuff that comes up once in awhile — less than once a month) such as auto and house maintenance, clothing, insurance, etc. But we won’t get into that now, as we want to keep it simple. In the second column, put down the amounts for each. Be sure to put enough for things like gas and groceries, as you don’t want to be short. Be sure to also include your minimum debt payments and your emergency fund deposit. Now, list your income sources and monthly amounts. There. You’ve got a temporary spending plan (you’ll want to add the irregular expenses later). Now, if the expenses are greater than the income, you’ll need to make adjustments until the expenses are equal to or less than the income.
  6. Use a cash only envelope system. You may find it hard to keep track of your spending and ensure that you’re sticking to your spending plan. Here’s the key: first do the emergency fund deposit. Then do the debt payments. Then do your monthly bills. Then withdraw the variable amounts in cash, and put them into separate envelopes. When your envelope is empty, you can’t spend anymore. Continue to cut back on non-essential spending as much as you can at this point, so you’re able to stick within your spending plan.
  7. Start a debt snowball. Check out my post about the debt snowball method here.
  8. Grow your income. Another great way to get out of debt faster is to make more money. Look at ways you can make money on the side. Take 30 minutes to brainstorm. Are there ways you can start a small business online? Sell your stuff on eBay? Start freelancing on the side? Get a part-time job? This only has to be temporary, but the more money you make, the faster you’ll get out of debt. Be sure to apply every cent of your new income to your debt snowball.
  9. Track your progress. Use an app like Debt Payoff Pro to track your progress and keep you motivated.
  10. Celebrate! It’s important to celebrate, not only when you’re out of debt, but along the way as you eliminate each debt. Have fun! Make this a game. It feels so incredible to stop spending and gain control of your finances instead. Find free entertainment, make it a challenge to be frugal and save money and find cheap used stuff. Celebrate along the way (just don’t spend money doing it!).

Tony is a professional musician, lifelong learner, and blogs about how to downsize your life in order to make space for realizing your larger goals at You Only Do This Once.

Kim’s Comments: Congrats on paying off so much debt. I like that you said to do one thing a week. Sometimes we look at the whole picture, and it is so overwhelming that we stick our head in the sand and do nothing. 

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. Great tips Tony! I did many of them myself as I climbed out of credit card debt. I could not agree more with #5 or #10. Starting a budget was very difficult for me but it’s a huge part of where I am today. It’s also vital to celebrate and give yourself some rewards for making it along the way and for finishing. It can keep you going when you want to give up. Great work!

    • Thanks for the comment, John! I am normally pretty hard on myself, so I always need to remember to pat myself on the back once in awhile for hard work well done. I think the shame of getting myself in the rut in the first place makes me feel as if I shouldn’t celebrate….that’s what got me into debt to start!

  2. This is some good stuff! Having a plan is the best way to get out of debt, and you included some things that people can actively DO and feel like they are making progress.

    • Thanks, DC. I have learned while blogging that you have to want to HELP people. I love talking about my experiences, but if there is not an action plan that others can follow, I’m just totting my own horn (musician pun). Take care!

  3. These are great tips Tony. Most of these are what I used to dig myself out of my debt hole. I also appreciate the Celebrate tip. That is key as long as you don’t celebrate yourself right back into debt with a shopping spree!

    • Thanks, Grayson! As I said before, the “celebrate” part is tough. I put it in there because some people really need to do it. I must admit that I don’t do it too often. My wife is really incredible; she figures out ways to go to a thrift store and spend $3 to celebrate. She’s awesome…

  4. Good points! I would add that you still need to gain control over credit card use or you will return to the same old bad habits.

  5. These are certainly great tips and I did nearly all of them when we first started getting out of debt. We’ve been more lax on the cash envelope system and we’re not as intense with paying off our debt these days, but we’re getting there.

  6. Well done Tony! looks like just a few months of hard work can really pay off.

  7. I like what you said about listing your debts. When I was an advisor, we’d do that exercise with clients, who’d always avoid this step. They “had it in their head.” Once you have it down in writing in front of you it’s so much more real.

  8. Congrats on taking control of your debt. I know exactly how hard it is to do. And I love that you say to celebrate along the way. That gives you the motivation and excitement to carry on.

    Last year I did a spreadsheet with all of our budget and a section with all of our debts, totals, min. payments, interest rates. When I hit calculate grand total I almost fell out of my chair. I had a pretty good idea of how bad it was, but seeing it on the screen in black and white made me sick.

  9. Great points. Having been in serious debt before I can really relate to having that conversation with yourself and admitting I have a problem with money. I lived in denial for years and my spending became a viscous cycle. Very stressful time.

    • Yes, Kyle. You are spot on. Luckily for me I was brought up as a musician. When in high school and college I had to record myself playing and have a private lesson every week. Listening to the recordings and hearing my teacher point out my flaws increased my capacity to take in constructive criticism. I think it’s important to realize and accept weaknesses. It makes us stronger in the long run.

  10. Having an emergency fund is a big one! It took us awhile to get that in place, but I’m so glad we did.

  11. Hey Tony,
    You and I have chatted and I know you have done and continue to do well. Keep up the great work mate… let nothing stand in your way. Mr.CBB

  12. I’m beginning to think that a $1000 emergency fund isn’t sufficient. That’s what we have, but every emergency we’ve had since we built that up was well over $1000 and we wound up accumulating more debt. I’m thinking $3000-$5000 may be better.

    I wonder how long ago Dave Ramsey came up with that number. You have to adjust for inflation!

    • I completely agree. But for someone just starting out, it’s a great jumping off point. I also think 6 months living expenses is too much, but that is just me. 3 month’s worth of expenses is a pretty healthy emergency fund IF you are decently employed, in my opinion. Thanks for reading!

  13. These are great tips and cover the most important aspects of debt management.
    For me the most important part now is just tracking my progress as it really helps to keep me motivated.

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