In 2015, the average American household had over $16,000 in credit card debt. This is a problem that can feel insurmountable, but it’s not impossible to overcome. Here are some tips on how to get out of debt and stay out of debt for good.[1]

What Is Debt?

Debt is an obligation that requires one party to make payments to another party. The debt may be incurred by individuals, corporations, or governments.

In most cases, debt is incurred in order to purchase goods or services that will be used in the future. For example, a family might take out a mortgage to buy a home, or a business might take out a loan to purchase new equipment.

Debt can also be incurred in order to finance investments or other activities. For example, a company might issue bonds in order to raise money to build a new factory.

The payments that are made on debt are typically made over a period of time, and they are often referred to as “interest payments.”

Interest is the cost of borrowing money, and it is typically expressed as a percentage of the total amount of the loan. For example, if you take out a loan for $100,000 at an interest rate of 5%, you will owe $105,000 after one year.

The interest payments on the loan will be $5,000 per year. After five years, you will have paid $25,000 in interest payments, and you will still owe the original $100,000.


How To Get Out of Debt and Stay Out Of Debt?

1. Pay off your high-interest debt first.

Paying off high-interest debt is a great way to get out of debt and stay out of debt. By definition, high-interest debt has a higher interest rate than other types of debt, which means you’re paying more in interest over time.

As a result, it can be very difficult to get out of debt if you’re only making minimum payments on your high-interest debts.

However, by paying off your high-interest debt first, you can save money on interest and get out of debt more quickly. In addition, by keeping your high-interest debt under control, you’ll be less likely to fall back into debt in the future.

So if you’re looking for a way to get out of debt and stay out of debt, focus on paying off your high-interest debts first.


2. Create a budget and stick to it.

Creating and sticking to a budget is one of the most effective ways to get out of debt and stay out of debt.

A budget allows you to track your income and expenses so that you can make adjustments to ensure that you are not spending more than you are bringing in.

It also allows you to prioritize your spending so that you can pay off high-interest debt first and save for important goals.

When you stick to a budget, you are in control of your finances and you can make decisions based on your long-term financial goals rather than impulse spending.

By creating and following a budget, you can get out of debt and stay out of debt.

To learn how to create a budget and stick to it, read more here.


3. Make a plan to pay off your debt.

Developing a plan to pay off debt is a key step to getting out of debt and staying out of debt. Without a plan, it can be easy to get into debt and difficult to get out.

A plan forces you to think about your spending and make changes to ensure that you’re living within your means. It also allows you to focus on paying off your debt, rather than just making minimum payments.

If you’re not sure where to start, there are many resources available to help you develop a plan that’s right for you.

Once you’ve made a plan, stick to it and don’t allow yourself to get back into debt. With discipline and determination, you can get out of debt and improve your financial future.


4. Stay disciplined and don’t overspend.

Another way to get out of debt and stay out of debt is by staying disciplined and not overspending. When you’re disciplined, you’re able to stick to a plan and make sacrifices when necessary in order to achieve your financial goals.

This might mean saying no to a night out with friends or going without that new piece of clothing you want. It’s not always easy, but it will be worth it in the long run.

Additionally, by not overspending, you’ll be able to keep more of your money and use it wisely. This means being mindful of your spending and only purchasing what you need.

It might take some time to get used to, but it’s a habit that can definitely help you get out – and stay out – of debt.

Learn more about the rules of money here.


5. Find ways to make more money or reduce your expenses.

One way to get out of debt is to find ways to make more money. This can include getting a better paying job, starting a side hustle, or investing in assets that generate income.

Another way to become debt-free is to reduce your expenses. This may mean downsizing your home, getting rid of unnecessary subscriptions and memberships, or cooking at home more often.

By increasing your income and reducing your spending, you can gradually pay off your debts and avoid accruing new debt in the future.

This process requires discipline and patience, but it is a achievable goal for those who are willing to commit to it.


6. Avoid taking on new debt.

One way to get out of debt and stay out of debt is by avoiding taking on new debt. This may seem like common sense, but it can be difficult to do in practice.

When you’re already struggling with debt, the thought of adding more debt may seem appealing. After all, it can be difficult to keep up with monthly payments when you’re barely scraping by as it is.

However, taking on new debt will only make your financial situation worse in the long run. The additional interest payments will make it even harder to get out of debt, and you’ll be right back where you started.

If you’re serious about getting out of debt, avoiding new debt is essential.

7. Pay off your smallest debts first.

Paying off your smallest debts first is a great way to get out of debt and stay debt-free. By doing this, you’ll be able to see your progress more quickly, which will keep you motivated to continue paying off your debts.

Additionally, this strategy can help to reduce the overall interest you’re paying on your debts, as you’ll be paying off the debts with the highest interest rates first.

As a result, you’ll save money in the long run and be less likely to find yourself in debt again in the future.


8. Negotiate lower interest rates with your creditors.

By definition, interest is the cost of borrowing money. When it comes to debt, the higher the interest rate, the more you end up paying in the long run.

That’s why it’s in your best interest to try to negotiate a lower interest rate with your creditors. Not only will this save you money on your monthly payments, but it will also help you get out of debt faster.

And once you’re out of debt, you’ll be in a better position to stay out of debt. So if you’re struggling with high interest rates, don’t be afraid to reach out to your creditors and try to negotiate a better deal. It could save you a lot of money in the long run.


9. Make more than the minimum payments on your credit cards.

When you make only the minimum payment on your credit cards each month, most of your payment goes towards paying interest, not the actual balance.

This means it will take you much longer to pay off your debt, and you’ll end up paying more in interest overall. If you can afford to, always pay more than the minimum payment.

That way, you’ll get out of debt faster and be less likely to rack up more debt in the future.

10. Educate yourself about personal finance.

One way to get out of debt and stay out of debt is to educate yourself about personal finance. When you understand how money works and how to manage your finances, you are better equipped to make wise decisions with your money.

Additionally, by learning about personal finance, you can develop a budget that will help you live within your means and avoid accumulating debt. There are many resources available to help you learn about personal finance, so there is no excuse not to take advantage of them.

By educating yourself about this topic, you can set yourself on the path to financial freedom.



Congratulations on getting out of debt! It’s not an easy task, but it is well worth the effort. Now that you are debt-free, it’s important to stay that way.

Here are a few tips to help you maintain your new status as a debt-free individual. First, create a budget and stick to it. Make sure you know where every penny goes so you can be sure not to overspend.

Second, start saving for emergencies. You never know when something unexpected will happen, so it’s always best to have some money saved up just in case.

Finally, avoid temptation. Don’t go shopping unless you have the cash to pay for what you want or use.