Take Action: The 3 initial steps to getting out of debt

Credit, Credit Cards and Debt management
By Becca Allison

You may not want to admit it, but you are in debt. It is your credit card, that loan you are not paying, the money you owe your grandma. Instead of being afraid and in denial, read up on how you can take control and get out of this financial mess.

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Debt. Who knew one little word could be so scary? If you have ever been in debt, you know that it can feel like trying to empty a pool with an eyedropper.

Little by little, your debt is taking away from something huge, and feeling like you are going nowhere. At times debt can be a good thing; helping you to buy a home, getting a degree to earn a higher salary, buying a car, or making other important larger purchases. It is when we don't plan correctly around that debt that we can drown.

It doesn’t have to be this way.

With a debt repayment plan, you’ll be steadily moving in the right direction, emptying that pool at a steady and easier rate. Don’t worry, you won’t be doing it alone. Follow these steps and your debt management will be smooth-sailing.

The first step? Setting a budget.

If you’ve ever visited Apruebame.com before, you’ve undoubtedly heard us talk about the importance of setting a budget. Not to hit you over the head with the same information over and over, but your budget is the glue that holds together your finances. The pieces of bread that contain your flavorful sandwich of spending. The frame containing the painting of everything you buy in life. Are these analogies getting old? Do you get the point? Okay.

Your budget will help you see where your spending goes every month and help you to limit how much you’re allowed to spend each month. If you aren’t in debt yet, this can help keep you out. Run through our step-by-step guideline on Take control! Here is how to budget in 4 easy steps to get yourself started and acquainted with the basic principles. A crucial part of your budget in this instance will be how much you can dedicate towards paying off your debt.

Plan and Prepare

Knowing how much you owe helps you to feel more prepared in your plan of paying off debt - and your plan will look different depending on the kind of debt that you have. Things like student loans and mortgages will have lower interest rates than you credit card debt and car loans.  Understand how much you owe and to whom. Know what their interest rates are and prioritize those higher interest rates and APRs so that the big guys don’t gang up against you. And if credit card debt is the issue, focus on paying off one card at a time.

You can also download one of our checklists, to get concise advice and steps that can help you take control of your interest rates and prioritize debt repayment.

Not only will you prioritize your debt payments against each other, but you will need to prioritize your overall debt payment in general. This way, you don’t find yourself backpedaling and having to recalculate your budget every month as your fees on interest rates keep going higher and higher.

If you think you might be taking on a bit more than you can handle, there is hope. You might want to consider credit counseling, which gives you the help of a professional on figuring out the right plan for you. You’ll want to seek help from a non-profit, accredited agency. So do your research, and this just might be that last push that helps you get by.

Get creative!

You already have a budget, which is great. But when you’re paying off debt, you could benefit from a little extra cash. So how do we do that? You don’t need to shut yourself off from society or start living off ramen noodles, but it does require getting a little creative.

I bet if we looked at your budget right now, there’s at least one section that could lose some of its fluff. But like I said, we aren’t trying to strip you of all things good in life so that you’re just barely surviving on the essentials. Instead, try finding little ways to save money here and there. Here are some ideas:


  • Never go shopping without a coupon.You can either break out the scissors and go through all those old newspapers that you don’t look at or embrace the digital age and go online. Websites like Coupons.com, Groupon.com, and RetailMeNot.com each have so many offers for you to browse through. And don’t forget the most obvious to check the stores website before heading in.


  • Consider the lower-cost option of some of your favorite products.I promise, the store brand of allergy medicine works just as well as the name brand.


  • Find deals.Coupons and deals go together; they’re not mutually exclusive. Check out some of these deal aggregators to save even more money on your purchases: TikTakTo.com, Yipit.com or Dealery.com


  • Try negotiating the price of your bills.You might not have even known it was a possibility, but it could be time to get a little pushy and see if you can wiggle your way into getting some of those costs down. The bot, Trim, is a great source to help you do this.


  • Look for free entertainment.Instead of going to the movies every weekend, explore what your city has to offer. Chances are, there is a lot going on that you don’t know about.


Not only can you find ways to cut spending, but you can look for how to earn more too! Here are some simple ways to boost up your cash reserves.


  • Find some extra hours at work. 

This may sound like the last thing you want to do, but if your situation is bad enough, a couple extra hours a week won’t be too bad and could really help you out in the long run. 

  • Sell your old stuff. 

Consider holding a yard sale, or if that’s a little too old-school for you, there are tons of apps and websites geared towards helping you sell all your clothes and things you don’t need anymore. Letgo and 5mile allows you to sell almost anything, Poshmark is a great way to sell clothes, Bookscouter helps you to sell books and Decluttr will pay you for DVDs, CDs, and most other gaming and entertainment-related electronics.

  • Participate in surveys for cash. 

We already know you’re probably looking at either a phone or computer screen when you watch the TV at night, so you can look into various sites that will pay you to complete surveys! (I mean, we all love talking about ourselves anyway, you might as well get paid to do it.)


A little bonus tip…


While prioritizing your debt is important, it’s still crucial that you continue saving. In the event of an emergency, you don’t want to have nothing saved up, or else you could be right back where you started - and putting emergency expenses on your credit card would not be a good idea.

You also don’t want to forget about retirement. You may have a $0 balance now, but when you’re finally ready to settle down and move to Florida or to Puerto Vallarta, what will you have left yourself with?


The Bottom Line.


The bottom line is, be good to yourself. Be realistic, give yourself some hard deadlines, and think about all your goals for the future. If you stick to the right guidelines and treat yourself right, a little debt isn’t a bad thing - it could even help you accomplish some of your life goals with limited stress as you manage it correctly.

Also, remember it is better to start paying off your debts, even if slowly, than trying to ignore them. They won’t just go away or disappear. In fact, they could haunt you and ruin your financial opportunities in the future. Just do it. You can achieve more than you believe, especially if you plan and you start one step at a time.

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