Career Advice - A Community Blog

Erik Larson writes about the job market, resume improvement, and career advice

5 Simple Steps to Help You Get Out of Debt

Written by Erik Larson, Community Blogger | Oct 3, 2017 8:08 PM

Being in debt is something everyone wants to avoid, but many people will fall into debt at some point in their lives. Climbing out of debt can seem like a daunting task, but you don't need to be a financial expert to manage your money wisely and recover financially. Here are five simple steps to take that can help you pay off your debt:

1. Find the Root of Your Problems
One problematic tendency that many people have regarding debt is to put temporary fixes in place without addressing serious problems. Be honest with yourself: what behaviors got you into debt in the first place? (3 Simple Ways to Get Out of Debt) Whether your problem is impulse purchases, unwise investments, gambling or anything else, it's hard to get out of debt if you use temporary fixes and let the problems continue. If you're having trouble figuring out what your biggest problem is, try making a spreadsheet and tracking all of your spending.

2. Lower Your Interest Rates
High interest rates on existing debt is a problem, because the money you owe can start to grow rapidly. However, in some cases, it may be possible to lower your interest rates. Depending on your credit, you may be able to get substantially lower interest rates on your credit cards, so contact your credit card companies. You can also make an account on or the variety of similar sites to to view low rate balance credit cards available to you. (How to Get Out of Debt)

3. Apply for a Debt Consolidation Loan
Debt consolidation loans are when a consumer is granted a loan to help pay off debts to credit card companies, student loans, etc. This results in your bills being consolidated in one place--all bills are to pay off the loan--which means you don't have to track multiple debt payments per month. (Debt Consolidation Loans) This eliminates the possibility of becoming overwhelmed and forgetting to make a monthly payment.

4. Use the "Debt Snowball" Method
The "Debt Snowball" is when you list all debts you owe from smallest to largest. The idea is to begin by paying off as many of the smaller balances as your excess funds allow. (11 Ways to Get Out of Debt Faster) As you pay off some of the smaller debts, start putting the leftover money into the next debt and so on. This can help keep you organized and speed up the process of climbing out of debt. This method also provides small psychological boosts in the beginning as you pay off smaller debts, which can help motivate you to earn and save more money and pay off your debt faster.

5. Follow a Minimalist Budget 
While it requires a bit more effort than some other method, creating and living on a minimalist budget can be an effective way to get out of debt. The idea is to create a bare-bones budget that factors in the essentials, such as food, utilities, gas money and housing payments, while eschewing any unnecessary spending, including impulse buying, eating out, going to the movies, etc. It can be difficult to follow such a minimalist budget if you aren't used to it, so try to keep in mind that it's only temporary: as soon as you make progress paying off your loans, you can start to allow yourself some more frivolous spending. In addition, if you're struggling to stick to the essentials when starting out, you can try allow yourself one unnecessary purchase per week for when you really need a new album or a trip to your favorite restaurant.

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