Learn How to Get Out of Debt in 11 Steps

How to Get Out of Debt in 11 Steps - Learn how to become debtfree and live the life you deserve!

Henry David Thoreau once said, “Almost any man knows how to earn money, but one in a million knows how to spend it.” Translation: Most people have not mastered the simple art of frugal living – living within your means. It is common place to use credit cards and buy on a whim.  Moreover, debt continues to grow and as your paycheck fizzles away, plastic replaces reality. Spending more than you make becomes a habit and your debt becomes a way of life.

Are you in debt? You are not alone. Over 50% of Americans are in debt right along with you. The average American family carries a credit card debt of $8,377 according to CNBC.com.

One solution is to toss up your bills and hope you win the lottery, but your odds are super low.  So now is the time to solve your debt dilemma.

Reasons to Pay off Debt:

  • piece of mind
  • ability to save for an emergency fund
  • less stress
  • no family fights about money
  • own your house and car outright
  • less bills
  • pay less interest


Now, many think paying off debt today is near to impossible. Yet, this type of thinking will bury you further in debt.

However, most financial advisors will tell you, you should have started yesterday. I’m here to tell you, there is no time like today.

I have created a list of 11 steps to help you rise above your debt. “Every journey starts with one small step.” Start somewhere and start small, but just start. Try one tip a week until you are on track. Furthermore, create a budget you can live with, while still paying off debt. Sure, buying all that stuff was fun, but now it is time to take a hard look at where your money is going and how you can make your money work for you, by paying off debt and saving. Let’s begin…

11 Tips to Living Debt Free 

1. Create a budget – Using a budget is key to living within your means. To learn more about budgeting click here.

2. Cut spending – Once your budget is in place, you can begin to cut unnecessary spending. Trim the fat off your budget and cut corners where you can. Make sure you have figured in a workable amount, to begin to pay down debt. Here is a post on how to cut your grocery bill to help you get started. There are many ways to start downsizing your budget.

Yet, another idea is to have a “No Spend” week. To learn more about a “No Spend” week, check out my fellow frugal living blogger’s post over at startsavingtoday.com. (Click here)

Other ideas to cut spending:

  • make your own coffee
  • eat out less
  • meal plan
  • coupon
  • carpool
  • cut magazine subscriptions
  • cut gym memberships (find frugal workout ideas here)
  • follow your store sale cycles and stock up
  • eat vegetarian meals two-three times a week
  • air dry your clothing
  • buy  local and seasonal produce
  • do your own manicure

3. Spend less than you bring in – Living within your means is the first step to becoming debt free. After you work on your budget, write down exactly where your money is going. Then come up with ways to save while budgeting for needed expenses. Finally, cut out areas that are not essential, until you have more money coming in than going out each month.

4. Set aside money to pay off debt – You can start a side hustle until you start to catch up. Taking on an extra job for a while will help you set aside money to pay down debt. Do not, I REPEAT, do not go out and spend your extra money. I know it is tempting and most people have the mindset, “The more money I earn, the more money I can spend.” However, if you earn extra money or a raise, continue with the same living standards and use the extra money to pay off debt. Then save for an emergency fund. After the debt is paid off and you have built your savings, you can work less, but you may need to hustle for a few years.

5. Pay more than the minimum on your credit card – If you are only paying the minimum, it will take years to pay off your credit card debt (or any debt for that matter). However, many credit cards offer a service online to calculate how long it will take to pay off the balance using a specified amount of money. Take advantage of this and learn how much and how long it will take to begin paying off your credit card debt.

Many do not realize, if you are only paying the minimum, you may not even put a dent in your bill because the interest is accumulating. Once you determine how much you will need to pay monthly, set aside that amount and use it to pay the balance. It helps to have this money in a separate account.  Also, start with paying off your smallest debt first. After you have paid that debt, move to the next smallest debt and continue until all of your debt is paid. Not only will you have more money for the larger bills, you will also feel accomplishment which will motivate you to keep at it.

6. Pay your bills on time to avoid late fees – Maybe I should have put this one first, but if you have gotten into the habit of paying your bills late, set up an automatic payment online or at least set up a payment reminder. I caution you to make sure you have money in your account to avoid overdraft fees. Furthermore, I recommend you declutter your house and create an area for bill organization.

Organize your bills
Organize your bills

7. Stop paying bank fees – High banking fees will add up. If you do not know what your bank charges for things like ATM withdrawals, checking accounts, and overdraft fees do some investigating. Next, find ways to cut these fees by switching banks or only using your home ATM.

8. Eat at Home and Meal plan to save money – Eating out at restaurants often or ordering carry-out can destroy a budget. Yet, meal planning saves time and money. If you plan your food and shop accordingly, you will only spend a certain amount on groceries and you will not have to keep running back to the store. Hence, you will have more time to budget! Here is an example of a meal plan with two weeks worth of dinner meals for under $75. (Click here)

9. Downsize – If you are living in a house or renting an apartment you cannot afford, it is time to move to a cheaper alternative. This may be the hardest thing you have to do, but if you are living in a high rent apartment, it will pay to shop around and find something cheaper. Moreover, downsize for a few years until the bills are paid. If you own a home, this will be trickier. You will need to sell and find a house that fits your budget. This seems extreme, but if you cannot afford your house, you do not want to risk losing equity and it is better to cut your losses before you are in over your head and risk foreclosure. Also consider a cheaper used vehicle with low gas mileage.

10. Sell unwanted, unneeded or unused items – You can turn your unused items into cash to help you pay down debt. Some sites I recommend are Poshmark, Mercari, and local Facebook groups, but a garage sale will work too. Make sure to deposit the money right away so that it is not used for something else.

11. Cut up your cards and pay cash – Credit cards require a huge amount of self-discipline. Use a cash envelope system and stop charging in its tracks. Say goodbye to your credit cards and pay cash. An easy way to do this is to set aside money in envelopes designated for each bill or expense. For example, label an envelope “Groceries” and put the allotted amount in that envelope. This actually tricks your brain into spending less.

There you have it, my friends. Remember to create a budget and stick to it. Stop paying late fees and bank fees. Cut grocery spending with meal planning and eat at home. Start selling items you no longer use and get rid of your credit cards, once and for all! These simple steps will help you become debt free and learn how to live within your means. Work harder now, so later you can relax and enjoy your debt free life.

To make sure you don’t miss my future post on Spending Journals or any other post, sign up for the I Heart Frugal Newsletter here:

Newsletter signup

Sign up for the I Heart Frugal newsletter!

Please wait...

Thank you for sign up!

I hope my post helps you live your best life and become debt free.What are your best ideas for living debt free? Leave me a comment. I would love to hear from you. Until next time!

Take care – Sarah

Related Posts:

  1. 7 Money-Saving Tips to Dramatically Slash your Grocery Bill
  2. How to Create a $40 Meal Plan Your Family Will Love
  3. Secrets to Saving for an Emergency Fund Now
  4. Budget Friendly Meal Planning

10 comments on “How to Get Out of Debt in 11 Steps”

  1. I am currently cleaning out my house to sell things to earn a little money back. I am trying to pay off my student loans before we have kids. It is challenging but do-able. Great tips, Sarah!

    • Thank you Danielle! Try Poshmark or Mercari if you are looking to sell online! It took me a while to pay off my student loans but it was worth it not to have that debt following me!

  2. One of the things we need to start doing in eating out less! Also when I go grocery shopping and buy really healthy ingredients and lots of fruit and vegetables (my husband and I are vegetarian) it costs almost double than if I was buying more processed foods. So eating healthy is really expensive! That is why I have started growing my own fruit & vegetables! There are quite a few tips that you have listed that I am going to utilize! Thank you!

    • Thank you, Leah! I love to hear about struggles with budgets because it gives me ideas for new posts! I’m going to work on a budget healthy lifestyle post! I love your idea of growing your own. Take care!

  3. These are great tips!!! I cut cable 2 years ago and never regretted it! Also before I buy anything over $50 I make myself wait 48 hours first— guess what? After that time passes I usually have realized I don’t need that item after all…

  4. I am so thankful we are not in debt. These are some really great tips. Cutting coffee is a great one. It amazes me how many people go out for coffee several times a week. It is so expensive!!

Leave a Reply

Your email address will not be published. Required fields are marked *