The First Step To Getting Out of Debt (2024)

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I’m sure most of you have seen the movie “Confessions of a Shopaholic”? In the film, the lead character describes how she feel when she shops. She states, “When I shop, the world gets better, and the world is better, but then it’s not, and I need to do it again.”

It brought me back to my old shopaholic days when I would feel that same emptiness and sadness that would spur me to break out the credit card and purchase a new pair of shoes, new makeup or maybe that new designer bag I had been eyeing for a few weeks.

In the movie, the main character, whose name escapes me, attends a type of AA meeting for shopaholics and through a series of events comes to realize her addiction.

The First Step To Getting Out of Debt (1)

The First Step To Become Debt Free

That’s usually how it works. You don’t just wake up and come to the conclusion you have a problem. Instead over a period of time, you realize what a mess your financial situation has become and that fixing it is a life and death situation. In essence, you hit “rock bottom”.

In reality, rock bottom is the best thing that could happen to you. It’s that slap in the face, that wake up call, that realization that you are in big trouble. But, it’s also the light at the end of the tunnel, the beginning down the yellow brick road back home to financial sanity.

If you are someone who is faced with credit card debt, you’re not alone.

Read: We Quit Credit Cards {How Brian from Debt Discipline Paid Off 109K of Debt in 50 Months}

Millions of people are wracked with unmanageable debt. Many have used credit cards to keep them afloat in an uncertain economy. Others just spent more than they should have. No matter what your reason, credit card debt sucks.

You can change your financial situation. Many have, including me. I was once plagued with over 50K in credit card debt and paid it off! I’m now debt free.

The Wake Up Moment

I remember that first year I had to tell my daughter I couldn’t afford to buy her any Christmas gifts. And, just as vivid is that Christmas morning opening up the most beautiful coat she had purchased for me and the feeling of unworthiness I felt at her generous offering.

I knew at that moment that I needed to face my crappy ways with money head on or it would be the end of my financial security.

And that’s what I did.

Although I didn’t want to look at all the ways I sabotaged myself with money, how messed up my belief systems were around money, and how poorly I handled money, I was willing.

Being willing to look at these issues was quite liberating. Because in that moment of saying, “yes, I am willing to look at this and figure it out” I became completely energized, motivated, and powerful. I was a woman standing in my power, and I hadn’t done that in a long time.

What I came to realize was the more I was willing to go deeper and deeper, to peel back the layers of my story, the greater my transformation.

Read: My Debt Free Journey {We Quit Credit Cards}

So, here’s the question. Are you willing to look at your relationship with money? Are you ready to peel back the layers to see what motivates you to spend like crazy? Are you willing to do something right now, so you’re not flooded with guilt and shame because your debt is cranked up to a ridiculous level?

The answer is either yes or no — not maybe, not probably, not possibly, not let me think about it. You must decide if you are willing or not.

Will you stand in your power or not? “Yes” will give you that power.

[tweetthis]Saying ‘yes’ is the first step to becoming debt free. [/tweetthis]

Saying yes is a beautiful thing, and it’s well within your reach. Just dig down and take hold of it. It will help you transform your relationship with money and stand firmly in your power.

Remember, even if the world is a cold and lonely place, buying an expensive pair of shoes you don’t need isn’t going to make it a sweeter, kinder place. In the long run, how you see the world will remain unchanged, and you’ll be reminded of the cruelty, even more, when you open that credit card statement.

The First Step To Getting Out of Debt (2)

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The First Step To Getting Out of Debt (2024)

FAQs

The First Step To Getting Out of Debt? ›

Make a Budget

What is the first step in getting out of debt? ›

If you want to learn how to get out of debt fast, it's key to pay more than the minimum amount due each month. This way, you can start to tackle the interest and chip away at the principal balance. By cutting back on expenses in your budget (step two, above), you can allocate those funds toward your debt.

What is the first step of digging out of debt? ›

First, always pay the minimum requirement payments on your credit cards and loans. Then allot extra money toward paying down more debt and saving, according to your goals. A debt consolidation loan or a balance transfer credit card can also help lower overall interest payments.

What is the first step in reducing debt? ›

7 steps to more effectively manage and reduce your debt
  • Take account of your accounts. ...
  • Check your credit report. ...
  • Look for opportunities to consolidate. ...
  • Be honest about your spending. ...
  • Determine how much you have to pay. ...
  • Figure out how much extra you can budget. ...
  • Determine your debt-reduction strategy.

What is the first of three steps to start paying off your debt group of answer choices? ›

The debt snowball method: paying your smallest debts first

Then, pay the minimum amount each month on all debts, but focus the majority of your efforts on that smallest account. Once your smallest debt has been repaid, move on to the next smallest debt and repeat the process.

How do I get out of debt step by step? ›

If you're ready to get out of debt, start with the following steps.
  1. Pay more than the minimum payment. Go through your budget and decide how much extra you can put toward your debt. ...
  2. Try the debt snowball. ...
  3. Refinance debt. ...
  4. Commit windfalls to debt. ...
  5. Settle for less than you owe. ...
  6. Re-examine your budget.
Dec 6, 2023

What are the 5 steps for getting out of debt? ›

5 Steps to Getting Rid of Debt
  1. Set a goal. All successful projects start with a clear goal. ...
  2. Make a list of your current debts. In order to get rid of your debt, you need an accurate and complete list of the debt you have. ...
  3. Gather additional information on debt repayment. ...
  4. Make a plan. ...
  5. Stick with your plan.

What is the credit card forgiveness program? ›

Credit card debt forgiveness typically occurs as the result of a debt relief service known as debt settlement. With these services, debt relief experts negotiate with your creditors in an attempt to settle your debt for less than you owe.

How to dig yourself out of credit card debt? ›

Here are a few of the best ways to get out of the red.
  1. Find a payment strategy (or two) ...
  2. Consider debt consolidation. ...
  3. Negotiate with your creditors. ...
  4. Seek third party help. ...
  5. Open a balance transfer credit card.
Aug 8, 2023

How to get out of debt fast with low income? ›

To pay off debt quickly, focus on increasing your payments, starting with high-interest debts first, while minimizing new debt. Utilize strategies like the debt snowball or debt avalanche, and consider consolidating debt for lower interest rates if feasible.

Can I get a government loan to pay off debt? ›

While there are no government debt relief grants, there is free money to pay other bills, which should lead to paying off debt because it frees up funds. The biggest grant the government offers may be housing vouchers for those who qualify. The local housing authority pays the landlord directly.

How to aggressively pay off debt? ›

What's the best way to pay off debt?
  1. The snowball method. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. ...
  2. Debt avalanche. Pay the largest or highest interest rate debt as fast as possible. Pay minimums on all other debt. ...
  3. Debt consolidation.
Aug 8, 2023

How to pay off $10,000 credit card debt? ›

7 ways to pay off $10,000 in credit card debt
  1. Opt for debt relief. One powerful approach to managing and reducing your credit card debt is with the help of debt relief companies. ...
  2. Use the snowball or avalanche method. ...
  3. Find ways to increase your income. ...
  4. Cut unnecessary expenses. ...
  5. Seek credit counseling. ...
  6. Use financial windfalls.
Feb 15, 2024

How to pay off $30,000 in credit card debt? ›

How to Get Rid of $30k in Credit Card Debt
  1. Make a list of all your credit card debts.
  2. Make a budget.
  3. Create a strategy to pay down debt.
  4. Pay more than your minimum payment whenever possible.
  5. Set goals and timeline for repayment.
  6. Consolidate your debt.
  7. Implement a debt management plan.
Aug 4, 2023

How to pay off $20,000 in debt? ›

If you have $20,000 in credit card debt that you need to pay off in three years or less, you have multiple options to consider, including:
  1. Take advantage of a debt relief service.
  2. Consolidate your debt with a home equity loan.
  3. Take advantage of 0% balance transfer credit cards.
Feb 15, 2024

How to pay $30,000 debt in one year? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

What is the fastest way to pay off debt? ›

Here are five of the fastest ways to achieve debt freedom:
  1. Take advantage of debt relief services. ...
  2. Reduce interest where possible. ...
  3. Focus on your highest interest rate first. ...
  4. Take advantage of opportunities to earn extra income. ...
  5. Cut expenses where possible.
Mar 11, 2024

How to pay off $20k in debt fast? ›

Use a debt consolidation loan

With a debt consolidation loan, you borrow money from a lender and roll all of those debts into one loan with a single interest rate. This allows you to make one monthly payment rather than paying multiple creditors.

What is the 50 20 30 budget rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

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