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Follow These 10 Steps to Become Debt-Free
Feeling buried by credit card payments, student loans, or bills you can’t seem to get ahead of? You’re not alone. The average American carries around $6,600 in credit card debt. (source)
The good news? You can get out of debt — even if you’re on a tight budget, even if you’ve tried before and failed. This guide is here to show you how to get started, keep going, and finally breathe a little easier.
Let’s break it down into a simple, realistic plan that anyone can follow.
Why Getting Out of Debt Matters (And Why It Feels So Hard)
Debt is more than just a number on a statement — it’s a weight you carry every day. It affects your sleep, your stress levels, and your ability to plan for the future.
But debt doesn’t define you. It’s just something you’re dealing with — and you can change that.
When you become debt-free, you gain:
Peace of mind
Control over your money
More freedom to spend, save, and invest
Less financial stress in your relationships
The trick is to focus on small, steady progress — not perfection. If you follow these 10 steps, you will eventually become debt free. So, let’s jump in.
Step 1: Know Exactly What You Owe
Before you can make a plan, you need to face the numbers.
Yes, it might be uncomfortable. But this is the first real step toward freedom.
Here’s what to do:
List every debt you have — credit cards, personal loans, student loans, medical bills, etc.
For each, write down:
The balance
The minimum payment
The interest rate
Add up your total debt
Not sure where to start? Use our Debt-to-Income Calculator to see how your debt compares to your income.
You might feel overwhelmed at first, but remember — seeing the full picture is empowering. You can’t crush what you can’t see.
Step 2: Find Your “Why”
This part matters more than you think.
Why do you want to get out of debt? What would being debt-free allow you to do?
Your “why” might be:
Sleeping better at night
Taking your kids on vacation
Buying a home someday
Leaving a job you hate
Just finally feeling free
Write it down. Put it on your fridge. Make it your phone wallpaper if you have to. You’ll need this motivation on the tough days.
Step 3: Choose Your Debt Payoff Strategy
Now that you know what you owe, it’s time to choose your plan of attack.
There are two popular strategies:
The Debt Snowball
Focus on the smallest balance first
Make minimum payments on everything else
Throw all extra cash at the smallest debt
Once that’s gone, move to the next smallest
Why it works: You get quick wins and feel momentum early — which makes you more likely to stick with it.
The Debt Avalanche
Focus on the highest interest rate first
Pay minimums on the rest
Put all extra money toward the debt costing you the most
Why it works: You save more in the long run because you’re tackling the most expensive debt first.
Which is better?
Whichever one you’ll actually stick with. Seriously. The best plan is the one that keeps you going.
Step 4: Create a Bare-Bones Budget (Temporarily)
If you want to pay off debt fast, you may need to tighten your budget — at least for a little while.
This doesn’t mean you cut everything. It means you get clear on your needs vs. wants.
Start with:
Rent or mortgage
Utilities
Groceries
Gas or transportation
Minimum debt payments
Then look at where you can trim:
Streaming subscriptions
Takeout meals
Impulse buys
“Little” things that add up (like that $6 coffee every day)
Every dollar you free up can go toward crushing your debt faster.
Need help creating a basic budget? Check out our free guide + spreadsheet
Step 5: Use Every Extra Dollar Toward Debt
Once your budget is trimmed, start finding extra money to throw at your debt.
Try this:
Sell unused items on Facebook Marketplace or eBay
Pick up a few extra hours or a side hustle
Use tax refunds, bonuses, or stimulus checks
Cancel unnecessary subscriptions or memberships
Think of it like this: every $20 you throw at your credit card today saves you much more in interest later.
Step 6: Automate Your Payments
Set up automatic payments for:
All minimum payments (so you never miss one)
Your targeted “extra” payment for your focus debt
Why? Because when it’s automatic, it gets done. And you don’t have to rely on memory or willpower.
Some banks also let you round up purchases to pay down debt automatically — worth checking.
Step 7: Track Your Progress (Visually!)
There’s nothing like seeing your progress to stay motivated.
Use a debt tracker or spreadsheet. Or print out a free coloring chart (they’re surprisingly fun).
Each time you make a payment, you get to see the numbers go down — and that feels good.
Even if the progress feels slow, keep this in mind:
Every payment moves you closer to freedom
Every dollar paid off is a win
You’re not stuck — you’re in motion
Step 8: Celebrate Small Wins
Paid off your first credit card? Celebrate.
Cut $200 from your monthly expenses? Celebrate.
Even if it’s just a $50 extra payment — it counts. Progress is progress.
Pick small, free (or cheap) ways to reward yourself:
Take a walk somewhere new
Treat yourself to a home spa night
Watch your favorite movie, guilt-free
When you associate debt payoff with positive energy, you’re more likely to stick with it.
Step 9: Don’t Fall for Quick Fixes
While you’re working on paying off debt, be careful about “solutions” that sound too good to be true.
Avoid:
Payday loans
Debt settlement companies that charge upfront
Maxing out new credit cards to pay off old ones
“Zero down” temptations that create more debt
Stick with your plan. You don’t need a shortcut — you need consistency.
Step 10: Stay Focused (Even If You Slip)
Let’s be real: some months will be harder than others.
You might have an unexpected expense. Or feel tempted to spend. Or just get tired.
That’s normal.
The key is to not quit.
If you mess up:
Don’t beat yourself up
Don’t wait until next month to get back on track
Just adjust your plan and keep moving
You didn’t get into debt overnight — and you won’t get out overnight either. But every payment you make, every habit you build, gets you closer to being debt-free.
You Can Do This
Getting out of debt isn’t just about money — it’s about freedom.
Freedom to make choices. To sleep better. To stop worrying every time a bill hits your inbox.
If you follow the steps in this guide, and keep showing up for yourself — even imperfectly — you will make progress.
What to Do Next:
- Use our free Debt-to-Income Calculator to see where you stand
- Download our Budget Template to track everything
- Sign up for our newsletter for real-talk tips and support every week
Reminder: Debt doesn’t define you. But your next steps do.
