Five Steps to Debt Relief

Debt is something that many Americans have in common. Debt can be incurred for many different reasons, whether it is because of overspending, medical bills, or a less than rosy job market. This financial burden can quickly spiral out of control and cause stress and anxiety for people who are experiencing debt of any kind. Debt has truly gotten out of control when you are afraid to answer your phone because it might be a debt collection agency demanding payment. There are several steps that can be taken to extricate yourself from debt and allow you to sleep easy at night. These steps should be incorporated into daily life and should be used with a common sense approach. Depending on the amount of debt you have it may take a little while to make an appreciable dent and for this reason it is important to be diligent and patient.

Step One: Spend Less Money

The first step and this may be obvious, is to decrease the amount of money spent. This step is critical and will help you decrease your debt load the quickest. Many people do not realize how much money they spend on luxury items such as buying specialty coffee every day or buying snack foods. Buying these items can quickly add up and several hundred dollars a month can often be saved by taking a careful inventory of items that are not strictly essential for quality of life. The idea is not to enforce a Spartan lifestyle on yourself but to honestly look at your monthly budget and see where there is an unnecessary drain on your wallet.

Step Two: Pay Off Credit Cards

The next step is to take stock of your credit card debt. Look at cards with the highest interest rates and pay those off first. Credit cards generally have very high rates of interest and this can quickly accrue on your account. Another option is to switch your debt to a low-interest credit card. The goal is always to pay off the highest interest rate debt first. It is also a good idea to avoid putting new debt on credit cards. Try to pay for everything with cash if possible and save credit card spending for emergency situations or for small items that you can immediately pay off.

Step Three: Consolidate Debts

Debt consolidation is a good way for people to reduce the interest rates they are paying, as well as allow them the convenience of paying all debt under one loan umbrella. It is possible to obtain both secured and unsecured debt consolidation loans. Unsecured loans have a higher interest rate than secured loans. This is because debt consolidation companies incur a lower rate of risk if the loan they make to you is secured. Loans can be secured by using collateral such as your home or car. For many people, having all their debt in one place makes it easier for them to keep track of their loan payments.

Step Four: Stick to a Budget

Make a monthly budget and stick with it. Take a look at the necessary expenses, such as rent or mortgage payments, that you have every month. Add up every expense and see how much of your income is outgoing to provide food and shelter. If you have a sizeable chunk of money left over this should be used to pay off your most urgent debts first. If you have no money left after your necessary expenses it may be necessary to obtain another means of earning money. Perhaps it is possible to sell some items that you no longer need. Many people have collected vast amounts of junk in their homes that have not been used for years. Equipment such as exercise bikes or rowing machines is always in demand and can easily earn you some extra cash. Perhaps you may need to get another job or find some other way to use your talents to earn extra money.

Step Five: Cut Down On Grocery Costs

Cut down on your grocery bills. Many people spend hundreds of dollars a month on groceries. With a little prudent shopping and judicious use of coupons this amount can quickly be cut down. Buying fresh food and then cooking it is always cheaper than buying prepackaged food. Many stores have sales flyers that give their latest price reductions. Another thing that helps to greatly reduce the cost of food is to cut down the amount of meals eaten in restaurants. It may take a little extra time to prepare your own food, but in the long run it can add up to big savings and these savings can in turn be used to quickly pay off debt.

Most people should be able to follow these simple steps to cut down on debt and increase their ability to pay existing debt off more quickly. Some individuals may, however, require the help and guidance of experts to reduce their debts and stick to a monthly budget. There are many organizations available to help in this regard. Individuals needing guidance in their efforts at debt reduction may be interested in visiting

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