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How Anyone Can Get Out Of Debt

paying off debt once and for allOn Monday, we talked about how people, even smart ones, can get into debt. Getting into debt is easy and sometimes even fun, but there is always a price to pay. I don’t know about you, but I love having choices. Debt robs any choice besides having to make a payment. If you really want to start living the life you were meant to have, it’s time to get out of debt once and for all. The good news is that by following some simple steps, anyone can get out of debt.

 Accept Responsibility For Your Debt

Now when I say simple, that doesn’t always equate to easy. It’s simple to lose weight by burning more calories than you consume, but how many people struggle with that one? I believe the first step in getting out of debt is to let go of the reasons that landed you here so that you can move forward.

It doesn’t matter if your debt came from bad decisions, taking out too many student loans, not getting or keeping the job you wanted, or even from having medical bills. Once the balance is on your credit report, it’s all debt and your responsibility. Debt will never get paid off with excuses, blame, or pity. That may sound harsh, but until you accept the situation, you are pretty powerless to change it.

Believe That Debt Is Not Forever

Some people never really get out of debt because they pay one thing off and then finance something else. We did that a few times before we finally broke the cycle. Society tells us that everyone has a mortgage, car payment, and credit card bills. Unless you want debt to be your way of life, you need to learn that society is wrong.

Yes, I do have a mortgage and we bought our cars through financing, but that doesn’t mean we have to keep trading them in every few years while taking out home equity lines of credit to buy more stuff. Decide that your debt is not forever and imagine how far your money will go when there are no more payments.

Figure Out Where Your Money Is Going

Now that we’ve completed our mental gymnastics, it’s time to see why you are in debt. The reason is probably because you spend more than you think. It was an eye opener when we finally wrote down where all of our money was going every month. $800 on groceries! $200 for clothes! $250 for eating out! $50 for gas station snacks! $10 for a subscription that hasn’t been read since Bush was in office. If you don’t know how you are spending money, there is probably more waste and fluff than you can imagine.

How Much Do You Owe?

For people who have never had debt problems, it hard to imagine not knowing how much you owe. As people who abused credit cards, we didn’t want to know. You can set up automatic payments every month and never have to open a statement.

It’s OK to cry for a little while after you determined the final balance. I’m dead serious about that.  Next, put that debt number in a place where you have to look at it every day. We hung ours on the refrigerator.

Make A Realistic Budget

Budgeting is easier than you think. Write down all the expenses you can’t change like your mortgage, car payments, health insurance, etc. Then set realistic numbers for the variable expenses. If you are spending $800 a month on groceries, don’t set your limit to $100. If you do, you will fail, get discouraged, and give up on budgeting. I know because I did that more than once.

Also, don’t cut out all unnecessary expenses at once. I know some people have done this with success, but most of us are already depressed about our debt. Making entertainment mean sitting at home drinking water while playing Scrabble might not fly for people who are used to going out several times a month, at least in the beginning. While it’s important to make a smart budget, be realistic about what you can accomplish.

When you are used to having whatever you want when you want it, the ability to think about value gets lost. As you get further into your debt payoff, you’ll start to realize what things do add value to your life and what you can cut out.

Do You Have Something In Savings?

The emergency fund is very important for people who are in debt and live paycheck to paycheck. If you have nothing in savings, make that your first step. Having even $500 or $1000 in reserve could mean the difference between paying off debt or having to go back to using credit cards.

Figure Out How Much Extra You Can Put Toward Debt

After you’ve tracked your spending and come up with a basic budget, you’ve probably found a few things you can cut out or change right away that will add more money to your pocket. In a bloated household, you probably aren’t worried about $2o here or $10 there, but now it’s time to make every dollar count.

Challenge yourself to cut your grocery budget by $100 a month. Start packing your own lunch instead of eating out. Make coffee at home. Sell some of the things that are cluttering your life. There are tons of ways to find extra cash.

Whatever amount you come up with, put it directly toward the debt you have decided to tackle first. In our case, it was an American Express bill that was around $800. We were able to pay it off in a couple of months and it felt like we’d climbed Mt. Everest.

Look At Each Debt One At A Time

If we had looked at our debt as a whole every month, there would have been lots more crying and we might have given up and accepted debt for life. Instead we picked off our credit cards one at a time and celebrated every payoff.

That first $800 was kind of like pouring a glass of water on a forest fire, but it was our first step to getting out of debt forever. It was a victory and needed to be respected as one.

Making More Money: The Key To Erasing Debt

Even if you go cold turkey and cut everything to bare bones, it still probably won’t amount to more than a few hundred dollars a month. If you have large amounts of debt, you need to do more. Making money is the best and fastest way to get out of debt and beyond.

I’ve already done a few posts about how anyone can make more money. You don’t have to reinvent the wheel. Use the strengths you have to bring in more income. In my case, I took another optometry job. It doesn’t have to be sexy. It is hard to add more work hours to your week, but remember it’s only for a limited time. I’ll end today with a quote from Dave Ramsey that really stuck with me during out debt payoff,

If you will live like no one else, later you can live like no one else

Debt does not have to be forever!

Have you ever been surprised at how much you were spending? 

Image: Freedigitalphotos.net/Hywards


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 article. And a good reminder that getting out of debt is something that is achievable - for anyone! I know it took me a while to believe that it was something that I could do.

    I was surprised at how much I spent in a month by making multiple trips to the grocery store. I would go buy two or three items at a time as I needed them and that adds up! Now I make a list and only shop twice a month. It’s made a huge difference in my budget!

    Another spending problem for me was the impulse coffee purchase. Now I make my coffee at home (even to go) and only purchase coffee out if I’m meeting a friend. And those coffees are built into my “Entertainment” category in my budget.

    • Congrats on saving money with your coffee. I have never been a coffee drinker, but I know many people who don’t function if their coffee routine gets out of whack. I am always amazed at how much coffee is at shoppes. I guess it’s a good thing I never got into that.

  2. I was having this very discussion with someone last week. They didn’t think they could get out of debt and thought they were just destined for a life without financial success. So much of it comes down to choices and looking for ways to monitor the spending and bringing in more. Anyone can do it, though so much of it comes down to making that choice and taking action on it.

    • A common thing I hear is “I’ll owe Visa until the day I die.” I used to think that way too, but it doesn’t have to be like that if you are willing to make changes and face the music.

  3. We were very surprised at how much we were spending when we began tracking our spending years ago. Now that we keep any eye on it, it is much more under control. Using a zero-sum budget helps too.

  4. Making more money is a great way to get out of debt. That’s what I did with my student loans and it cut down my debt timeframe by many, many years.

  5. I was SHOCKED at how much I used to spend, and it was amazing how much change we started to make just by paying attention to our spending. I see the same thing with all of my clients. They always say they can’t save and assume their money is being spent reasonable; however, once we start watching it, they are surprised as well. It is true that debt is not forever, and anyone can get out of it with a responsible and reasonable plan of action and commitment to it, it’s totally doable.

    • It is amazing how much you can waste when you don’t pay attention. I remember my grandparents keeping track of every penny. I thought it was anal, but now I see how smart they were and why they never had money problems.

  6. Being realistic about how much you can afford to put toward debt is very important. When trying to get out of debt earlier in our marriage I would send every penny possible to the debt holders, in an effort to get a balance paid off. But then, as always happens, something would come up that we had to pay for like car repair or a new sump pump for our basement and we didn’t have any spare money because….wait for it ….I’d sent it all to the credit card company. So as you can probably predict, we had to put the repair or purchase on the credit card and up went the balance again. We finally got an emergency fund established which allowed us to pay for things as they occurred instead of being in that vicious cycle of using credit for things after paying on the credit card. Emergency funds made all the difference in the world.

    • I think once you get on board with paying off debt, it is tempting to throw everything at the debt, but life always happens. Keeping something back for emergencies is so important.

  7. Great info Kim! So much of it comes down to motivations and answer that “Why?” question. Why do I (or should I) want to get out of debt? If people can’t answer that question in a clear and compelling way they probably won’t drive themselves to get out of debt.

    • That’s a great question to answer. If you’re paying off balances so you can buy something else, it’s just going to be a vicious cycle.

  8. When I was first laid off and started freelancing and I had a come to Jesus moment and started adding up what I was spending, I was shocked. I think most people would be too if they have never done that exercise before. It’s so easy too to nickel and dime yourself to death too! I also agree that cutting everything at once could be a little too drastic for someone trying to change their life. Baby steps help!

  9. “Making money is the best and fastest way to get out of debt and beyond.” - yes! As you mentioned, certainly looking to reduce expenses is necessary but I see so many people just focus on ways to save spending and at some point, there is no more money to save. Frankly, I would rather people become mindful spenders and put more attention on earning more, than necessarily saving more. And yes, I think it is absolutely critical that people remember debt is not forever.

  10. Great tips Kim! These are all necessary steps to start getting yourself out of debt. I still struggle with my budget sometimes because I want to spend more on entertainment and eating out than what I budget for, but it’s a work-in-progress for sure.

    • We don’t spend much on entertainment unless we’re on vacation, but eating out is always a temptation. I don’t even like the food so much, but I love having someone cook and clean up for me.

  11. You absolutely need to figure out HOW and WHAT got you to that point or you’ll never succeed. Sometimes it’s obvious like=school, but other times it’s not….you can end up in a vicious cycle and not know if you’re not careful.

    • How, what, and I’d also add why. I think lots of spending and debt happen when people are trying to compensate for some part of life they aren’t happy with.

  12. Really motivating post, Kim. I think a lot of people who are in debt need some of this positivism to help them get and stay motivated to get rid of their debt. I love how you ended with making more money. Definitely a great strategy for finding additional money to pay down debt.

    • Making money is way more important than just about any of the steps besides tracking your spending. Making all the money in the world is useless if you just keep spending all of it for stuff you don’t need!

  13. Kim, great advice here. We just started the “look at your debts one at a time” thing, and I cannot believe the difference it’s made for us. Knowing that we simply have to worry about one debt at a time, and forgetting for a moment about the rest, makes our goal of debt freedom seem achievable.

    • I think when you have a big load of debt, it’s too depressing to constantly look at the big picture. Maybe check it every so often, but putting effort into one at a time certainly helped us.

  14. Our only debt is our mortgage and I can’t wait for it to be gone! You’ve laid out some great tips here for getting your finances under control.

    It’s always eye opening going over our buget if we haven’t been paying attention for a while. We’ll find things like $50 on gas station snacks. Well we pay at the pump so not that, but usually a slew of fast food bills. Tracking our spending has really helped us get our spending under control and more in line with how we WANT to spend. So I’m happy to see that suggestion here.

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