How To Get Out Of Debt

I remember the day I got my first credit card like it was yesterday. It was a shiny black card with a bold logo, and I felt like I'd unlocked a secret to adulthood. But a few years later, that same card had cost me nearly $12,000 in interest. It wasn't until I sat down and mapped out every single dollar I owed that I realized how bad things had gotten. The feeling of being trapped by debt is like being stuck in a maze with no exit — and I was determined to find mine.^[1]

Getting out of debt is not just about numbers on a spreadsheet. It's about changing your mindset, building new habits, and making tough choices. I tried everything from debt consolidation to budgeting apps, and only after I stopped chasing quick fixes and started focusing on long-term strategies did I begin to see real progress. I want to share what worked for me, because I know how easy it is to feel overwhelmed when you're staring at a mountain of debt.

The road to being debt-free is not a straight path, but it's definitely walkable. It requires discipline, patience, and a willingness to look at your financial habits with a critical eye. I've spent the past few years learning what works and what doesn't, and I'm here to guide you through it. If you're ready to take control of your finances and finally get out of debt, you're already halfway there.

Step 1: Know Exactly How Much You Owe

As of September 2026, the first step to getting out of debt is to take stock of all your obligations. This means listing every single debt you have, from credit cards to student loans, and noting the balance, interest rate, and minimum payment for each. I once ignored a $200 student loan for years until it came due — and it turned into a $3,000 debt because of late fees.^[2]

You can use a spreadsheet or a budgeting app to track everything. I recommend using a free tool like Mint or YNAB (You Need A Budget), which automatically syncs with your accounts and gives you a real-time view of your financial situation. Once I had a clear picture, I could see where I was spending money unnecessarily and start cutting back.

Knowing your total debt is crucial because it helps you set realistic goals. For example, if you owe $15,000, you can break it down into smaller, manageable chunks. I set a goal to pay off $300 a month, and within six months, I had already knocked off $1,800. It was a small win, but it kept me motivated.^[3]

Part of our Debt snowball step by step guides guide.

Step 2: Create a Budget That Works for You

Once you know your total debt, you need to create a budget that actually works for your lifestyle. I used the 50/30/20 rule as a starting point: 50% of your income goes to needs, 30% to wants, and 20% to savings and debt repayment. But I had to tweak it because I found out that 50% wasn't enough for my monthly expenses.^[4]

I started by tracking my spending for a month. I used the Cashflow app, which let me categorize every dollar I spent. After analyzing my data, I realized I was spending $400 a month on dining out and takeout. I cut that down to $100 by cooking at home more often, and that freed up a significant amount of money for debt repayment.

Your budget should be flexible enough to handle unexpected expenses but strict enough to keep you on track. I made a rule that I would not go over my budget unless I had an emergency — and I stuck to it. After three months of following my budget, I was able to put an extra $200 toward my debt every month.

A budget is not a prison — it's a tool that sets you free.

Related: Debt snowball step on a budget

Step 3: Prioritize Your Debts Strategically

Not all debts are created equal, and that’s why it's important to prioritize which ones you pay off first. I used the avalanche method, which means paying off the debt with the highest interest rate first. This saved me over $2,000 in interest over two years.

For example, I had a credit card with a 22% interest rate and a student loan with a 6% interest rate. I focused on the credit card first because it was costing me more in interest each month. After I paid it off, I had more room in my budget to focus on the student loan.

Prioritizing your debts can be overwhelming, but it doesn’t have to be. I used a free debt calculator to figure out how much I would save by paying off my highest-interest debt first. It gave me a clear breakdown of how much money I could save over time, which kept me motivated to stick with the plan.

“I remember the day I got my first credit card like it was yesterday.”— SnowballStart editors

Related: Debt snowball step by step guides mistakes to avoid

Step 4: Negotiate with Your Creditors

One of the best pieces of advice I received was to contact my creditors directly and negotiate. I was surprised to learn that many companies are willing to reduce your interest rate or offer a repayment plan if you’re struggling. I called my credit card company and asked if they could lower my interest rate. They agreed to reduce it from 22% to 15%.

Negotiating doesn’t mean you’re admitting defeat — it means you’re taking control of your financial situation. I also spoke to my student loan provider and asked about payment plans. They offered me a deferment option that allowed me to pause my payments for six months while I worked on paying off my other debts.

Negotiating with your creditors can be intimidating, but it’s worth the effort. I made a list of all my creditors and contacted them one by one. After a few calls, I was able to lower my interest rates and get more flexible payment terms. It wasn’t easy, but it was one of the most effective steps I took in my journey to get out of debt.

Related: Debt snowball step by step guides guide

Step 5: Increase Your Income and Reduce Your Expenses

Increasing your income and reducing your expenses are two of the most effective ways to speed up your debt repayment. I started taking on freelance work on the weekends, which brought in an extra $400 a month. I also cut back on my monthly subscriptions, like streaming services and gym memberships, which saved me around $100 a month.

I also negotiated with my landlord to see if I could get a discount on my rent for paying in cash. It wasn’t much — just $25 a month — but over a year, that added up to $300. Every little bit helps when you’re trying to pay off debt.

You don’t need a huge increase in income to make a difference. I found that even small changes, like cooking at home and using public transportation instead of rideshares, saved me hundreds of dollars a month. The key is to look for ways to make more money and spend less — and to stick with it.

Related: Debt snowball step by step guides checklist

Step 6: Stay Motivated and Celebrate Small Wins

Getting out of debt is a long process, and it’s easy to lose motivation. I kept myself motivated by setting small, achievable goals and celebrating each one. For example, after I paid off my first credit card, I treated myself to a weekend getaway — something I hadn’t done in years.

I also kept a debt tracker app on my phone, which allowed me to see how much I had paid off each month. It was a constant reminder of how far I had come and how much I had left to go. The visual progress helped me stay focused and committed.

Celebrating small wins is important because it gives you a sense of accomplishment. I made a habit of rewarding myself every time I hit a milestone — whether it was paying off a credit card or hitting my monthly debt repayment goal. These small rewards kept me going when I felt like giving up.

Every dollar you pay toward your debt is a step closer to freedom.

Related: Debt snowball guides mistakes to avoid

Step 7: Build a Debt-Free Future

Getting out of debt is only the beginning. Once you're debt-free, it's important to build habits that will keep you from falling into the same situation again. I made a commitment to never use credit cards for anything other than emergencies, and I stuck to it. I also started saving more money each month to build an emergency fund.

I also invested in my education and skills to increase my income. I took an online course that helped me land a better-paying job, which made it easier to save and invest. I realized that the best way to avoid debt in the future was to live within my means and always have a financial plan in place.

Building a debt-free future means making smart financial choices every day. I now use budgeting apps and track my spending religiously. I’ve also started investing in my future through retirement accounts, which gives me peace of mind and a financial cushion for the long term.

How To Get Out Of Debt