Blogging for Change

How to Get Out of Debt

by Emilie Burke on
6/15/2024
in Repaying Debt
Two women walking and talking outside.

Debt can feel like a heavy burden, weighing down your financial future and limiting your options. Whether it’s from credit cards, student loans, medical bills, or unexpected expenses, being in debt can be overwhelming – you may not know where to begin. If you’ve recognized that your debt is starting to get out of control, there are ways to get out of debt that break things up into manageable plans.

How do I begin getting out of debt?

With the right strategies, and a determined mindset, you can take control of your finances and get out of debt. At MMI we help you understand the different ways to get out of debt so that you can start repaying today.

Figure out your financial situation

One of the first steps to get out of debt is to know the big picture of your financial situation. Sit down and create a list or spreadsheet of every single debt you have, how much you owe each month, and your total balance. Include your monthly payments like rent/mortgage, utilities, and food so you know what needs to go out each month. Then create a budget to figure out how much you can afford to pay down on each account. Find ways to cut other expenses if necessary.

Contact your creditors

Your creditors don't want you to stop paying them, so it's often in their own interests to help if you're struggling. Explain your situation and see if they are willing to work with you to lower your interest rate, catch up on past due amounts, and negotiate a payoff amount. They may have short-term and long-term plans available to help you manage and eliminate debt. It's not a guarantee, but it's worth making a phone call.

Work with a credit counselor

If you're having trouble with either of the first two steps, a certified credit counselor may be able to help. Credit counselors serve as educators and advocates, providing budget advice and resources. A credit counselor can help you navigate different ways to get out of debt and find the best solution for you.

Looking for extra help getting out of debt? Consider working with a counselor to set you up on a debt management plan. In a debt management plan, you work with your creditors to reduce the interest rates on your unsecured debts and learn how to become and stay debt free.

Best of all, a credit counseling session is free, so if you're feeling stuck it's a great way to get immediate, impactful assistance.

Bring in extra income whenever possible

Making cuts to your budget is an effective way to divert cash toward your debt, but there are limits to how little you can spend. Eventually, cutting back will hit a wall, which is why you may want to seek out ways to add extra income. Consider exploring side jobs like freelancing and selling unused items online for additional income to help accelerate your debt repayment.

Create a plan and stick to it

Whether your creditor puts you on a hardship program, you start a debt management plan with a credit counseling agency, or you create a DIY repayment plan, the key to success is consistency. Having a plan to eliminate debt is great, but it only works if you follow through month after month.

How to become debt free

While becoming debt-free can be challenging, many resources are available to help you manage your finances and make more secure financial decisions.

Most ways to get out of debt require you stay consistent, forfeiting certain benefits if you miss one or more payments. This is why it's important that you settle on a repayment plan that fits your budget. If the plan is more aspirational than realistic, you may run into issues later down the line.

No matter how you decide to eliminate debts, the best advice we can give is that you start now. Whether you're in a panic or just feeling the first twinge of concern, the best time to get out of debt is now. The sooner you act, the more options you'll have and the easier it will be to become debt-free.

Get help getting out of debt. Debt management plans from MMI can help you get out of debt in less than five years. MMI clients saved an average of more than $40,000 compared to making minimum payments on their own. Complete a free online financial analysis and see how much you can save.

Tagged in Debt strategies, Goal setting

Emilie writes about overcoming debt, while balancing trying to eat healthy, stay fit, and have a little fun along the way. You can find more of her work at BurkeDoes.com.

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