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Get Yourself Out Of Debt It is incredible easy to get oneself into debt, and often very difficult (but not impossible!) to get oneself out of debt. Just like quitting a bad habit, different people do it different ways, but financial experts agree that often a combination of strategies works best.

1. Stop making new debt

This is the first thing that you should do. Sit down and write down your earnings as well as your expenses. By doing this alone, it will not bring you out of debt, but what it does do it stop your debt from getting worse! You can further reduce temptation by cutting all but your primary credit card in half, and storing one credit card in ice to reduce temptation.

 2. Prioritize one debt and pay it off

One big reason why it is so important to sit down and write out all debts, expenses, and income is to prioritize. Should you pay off the credit card with the high-APR and daily compounding interest, or split the money with the furniture store that has a flat-rate late penalty of $10 a month?

You can make significant advances by making large payments to just one account until that debt is completely repaid. While you do this, make sure to make the minimum on your other accounts. Once the one debt is paid off, then focus on the next debt priority (or priorities). Another way to think of this strategy is to rule out the slowest accumulating debts, and focusing on the ones that compound interest the quickest.

 3. Increase your monthly payment on the priority debts

People who pay the minimum amount of their debt per month generally speaking stay in debt. It also costs far more money to do so, thanks to interest accruing on interest. Often people who do this, if they get out of debt, end up paying two to three times more of the original charge. So continuing the idea of #2, increase the payment(s) of the debts that are a priority to re-pay.

 4. Consider credit counseling

Credit counseling agencies often can help. They can help secure you lower interest rates, lower minimum payments, and longer repayment terms. Credit counseling can help negotiate with the credit card companies for leniency, as well as give you the tools and support to get yourself out of debt and avoid going back into debt.

 5. Request a lower interest rate from your creditors

The higher the interest rate, the longer you will be in debt, and the more money you will repay. If you have a good history of repayment you can often negotiate a lower interest rate.

6. Balance Transfer

Consider using a balance transfer, as there are a number of excellent promotional rates out there. Make sure to watch out for a balance transfer fee, and if that does exist, crunch the numbers and make sure the balance transfer fee works out to your advantage.

A great option right now is this credit card that offers a 0% balance transfer for 12 months.

7. Have a rainy day fund

Building an emergency stash may sound counterproductive if you’re trying to pay down debt, but having a safety-net it can actually stop you from making more debt. If something comes up, and it is an emergency, you can use this fund instead of your credit cards. Once debt-free, try to have at least 6-months of living expenses, but in the short-term while repaying debt focus on a more manageable number such as $1,200 stored away.

 8. Constantly look for more ways to put money towards debt

The more money paid back, the faster you get out of debt! Be creative, but always be looking for ways you can pay down more debt. The budget you made in step one can be helpful here. Instead of Starbucks, consider homemade coffee. Shop at an upscale organic grocery store? Maybe consider planting your own garden this summer for a fraction of the cost. eBay is also a great way to sell items from your own home that are no longer needed.

9. Withdraw from your life insurance policy

Some life insurance plans let you accumulate some money, which you can use towards debt. With this, make sure to read the fine-print though, as some withdrawals have tax implications as well as it may affect the benefits your next-of-kin would receive.

10. Settle with your creditors.

If you owe more money that you can possibly repay, consider talking to your creditors. A settlement of your debts means you ask the creditors to accept a single, one-time payment to satisfy the debt. In return, your creditors agree to cancel the remaining amount owed. While this sounds too good to be true, know that usually creditors only accept this type of offer from borrowers who are at risk of defaulting. But know that it never hurts to ask.

Paying down debt will help free you from the financial shackles that weigh you down while you have debt, and big interest payments, looming over your head.  It’s recommended that you consider starting to repair your credit while you are working to pay down your debt.  This way, when you come out the other side, with less (or no) debt you will also have the highest possible credit score witch can save you a lot of money when getting a loan.

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