How to Get Out of Debt: A Simple Guide to Taking Control

Before you can get out of debt, you have to know exactly where you stand and which strategy will keep you motivated. The most effective plans start with organizing your bills and choosing a method that gives you quick wins to build momentum.

Feeling overwhelmed by debt is incredibly common, but you don’t have to stay there. Whether you have a few nagging bills or feel like you’re buried, there are clear, practical steps you can take to get a handle on your finances and start your journey to becoming debt-free.

Step 1: Figure Out Where You Stand

Before you can make a plan, you need to know exactly what you’re working with. The first step is to create a simple budget to see where your money is going.

Gather your bills and pay stubs and list all your debts from the smallest balance to the largest. This simple act of organizing gives you a clear starting point.

If you’re behind on payments, don’t wait for a collector to call. Contact your creditors directly to explain your situation and try to work out a new payment plan you can manage.

Step 2: Choose Your Strategy

Once you see all your debts listed out, you can decide how to attack them. A popular and highly effective strategy is the debt snowball method.

Here’s how it works:

Make minimum payments on all your debts except for the one with the smallest balance.

Throw every extra dollar you can find at that smallest debt until it’s gone.

Once it’s paid off, take the entire payment you were making (the minimum plus the extra) and roll it onto the next-smallest debt.

Repeat this process. As you pay off each debt, your "snowball" payment grows, knocking out the bigger debts faster and faster.

This method works because it’s about behavior and motivation. Getting quick wins by eliminating smaller debts gives you the momentum to keep going until you’re completely debt-free.

Step 3: Know When to Ask for Help

Sometimes, doing it yourself isn’t enough, and that’s okay. Reputable, non-profit credit counselors can be a huge help. They can advise you on managing your money, help you create a budget, and review your options.

A credit counselor might recommend a Debt Management Plan (DMP). With a DMP, you make one monthly payment to the counseling organization, and they distribute the money to your creditors. They can often negotiate lower interest rates or waived fees on your behalf, making it easier to get ahead.

You can find certified, non-profit counselors through organizations like the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

A Word of Warning: Debt Settlement vs. Credit Counseling

Be very careful with for-profit debt settlement companies. These are different from non-profit credit counselors. They often tell you to stop paying your bills and charge high fees, which is illegal for them to do before they’ve actually settled a debt.

This approach is risky—it can destroy your credit score, cause you to rack up late fees, and even lead to you being sued by your creditors.

A legitimate credit counselor will never guarantee to make your debt go away or charge large up-front fees. They are there to educate and guide you toward a realistic plan.

Getting out of debt is a journey, but it starts with a single step. By creating a plan, choosing a strategy, and knowing where to find trustworthy help, you can take back control of your finances for good.