Get Out of Debt

Stop Spending

Stop Spending!

The quickest way to get out of debt is to stop spending.

Don't fall for credit card offers such as airline miles or bonus points. Too many lines of credit can damage your credit score and are too tempting to use in that moment of weakness.

Pay Cash

Don't carry credit cards in your wallet/purse. The act of handing over cold, hard cash is much more intense than signing on a line and may cause you to reconsider that purchase. If cash is impossible for you, try using only your ATM/debit card.

Save Up

Save up for “splurge” items. If you must have those new shoes or iPhone, save up for it. If it takes you 3 months to save that money, you may either decide you don't really need it or that saving was more exciting than purchasing the item and you want to build up that nest egg for something really great, like a family vacation.

If you must have a credit card, make sure you don't charge more than you can pay in full at the end of the month. Pay your credit card in full and on time to avoid interest charges and late fees.

Check out our page on voluntary simplicity … and only purchase items in line with your goal!

Make a Budget and Stick to It!

Plan your monthly income and expenses and follow the rules you've set for yourself to get out of debt. There are many monthly budget plans available online. I've created this monthly budget plan using a blank Excel spreadsheet. If you don't have Excel, I recommend Open Office. (Open Office budget worksheet is here.) Don't forget to include expenses such as oil changes, license plate renewal. Also don't forget to add something to miscellaneous for small treats – you'll be better able to stick to your budget if it's realistic.

If you're repaying debt such as credit card bills, focus on paying down the card with the highest interest first. Cut up the card and send an extra $20 or $50 to the card with the highest interest each month until it is paid in full. Keep only one card, with the lowest interest rate, for emergencies and pay it off as soon as possible.

Consider Your Home

Can you find a smaller house or apartment? We often have more space than we need, and that square footage costs. Rent, mortgage, utilities … all paid on wasted space!

If you have a spare room, think about getting a roommate to help cover living costs. If a roommate pays half the rent and utilities in exchange for one room and a little less privacy, it may be worth it.

Small Changes Can Equal Large Savings

Think about small steps to saving: make coffee at home, take your lunch to work, take the bus instead of a cab, ride your bike instead of taking the car, sell the car and try when you do need a private ride; all small steps that can add big numbers to your bottom line an enable you to get out of debt!

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