Struggling with debt? Learn the best way to get out of debt fast in the U.S. with this step-by-step guide. Includes debt payoff strategies, budgeting tips, and proven ways to save money.
Getting out of debt isn’t easy, but it’s absolutely doable with a clear plan, discipline, and consistency. Here’s a detailed, step-by-step guide on the best way to get out of debt—no matter how much you owe.Best Way to Get Out of Debt: Step-by-Step Plan
1. Know Exactly What You Owe
Before doing anything, get a full picture of your debt.
- Make a list of:
- Who you owe (credit cards, loans, etc.)
- How much you owe
- Interest rates
- Minimum payments
- Use a spreadsheet or apps like Mint, YNAB, or Undebt.it
Why this matters: You can’t fix what you haven’t measured. This helps you build a strategy.
2. Create a Realistic Monthly Budget
- Track all income and expenses.
- Cut non-essentials (streaming, takeout, subscriptions).
- Aim to free up money to pay off debt faster.
Apps like EveryDollar or Goodbudget can help.
3. Pick a Payoff Strategy
There are two proven methods:
Debt Snowball (Popular for Motivation)
- Pay off smallest debts first, regardless of interest.
- Gives quick wins to keep you motivated.
Debt Avalanche (Best for Saving Money)
- Pay off highest-interest debt first to reduce total cost.
- Slower at first, but you save more in the long run.
4. Stop Adding New Debt
- Cut up or hide your credit cards (temporarily).
- Use cash or a debit card only.
- Avoid "Buy Now, Pay Later" and payday loans.
5. Lower Your Interest Rates
- Call creditors and ask for a lower interest rate—many will say yes.
- Transfer balances to a 0% interest credit card (if your credit score is decent).
- Consider refinancing high-interest loans.
6. Increase Your Income
If you can’t cut more expenses, earn more:
- Side hustles (DoorDash, freelancing, online tutoring)
- Sell unused items on eBay, Poshmark, Facebook Marketplace
- Ask for a raise or pick up extra hours if possible
7. Consider Debt Relief Options (Last Resort)
If your debt is overwhelming, explore:
- Debt consolidation loans: Combine all debt into one lower-interest payment
- Debt management plans: Work with a nonprofit credit counselor
- Debt settlement: Negotiate to pay less than owed (hurts credit)
- Bankruptcy: For serious, unmanageable debt (last resort)
Look for a nonprofit credit counseling agency, like:
8. Stay Motivated and Track Progress
- Celebrate small wins (paying off one credit card = a win!)
- Use visuals like debt trackers or charts
- Remind yourself of your “why”—freedom, peace of mind, better future
Pro Tip: Focus on Building Good Habits
Once you're out of debt, don’t stop budgeting. Start building an emergency fund and learn to live below your means to stay debt-free long-term.