Tip number one for getting out of debt is probably one of the most overlooked. Especially for people who have a bad habit of using their credit cards too often. Stop using them. It is very difficult to get out of debt if after making a $300 payment, you go spend $400. Some people suggest cutting them up. I’m not sure that is a good idea, but I would put them away. Maybe even get a safe deposit box. At least you’ll have to make a trip to get access to them.

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Tip number two. Create a budget and stick to it. The envelop system works great for this. If you budgeted $500 for groceries, get an envelop and put $500 cash in it. Once the money is gone, you don’t spend any more money in that category unless you take from another. Make sure the budget is realistic. For instance, you need to set aside money for fun. Don’t think you can go without some fun activities. You can’t and your will really mess up your plan to get out of debt.

Tip number three. Get an accountability partner. If you are married, certainly you need to be on the same page, but you may not make the best accountability partner for each other. Sometimes it is hard to ask each other the hard questions or tell each other no. But a good friend can. I would even suggest signing an agreement so that if give your friend a bad time, they can remind you of the promises you met. Share your budget, your frustrations, your trials, etc. They can help keep you on the right track.

Tip number four. Make a plan. In order to get out of debt, you’ll have to spend less then you are making. The money you are saving has to be put towards the debt you have. I have found the easiest thing to do is pay the lowest balance first. This might not actually provide you the best savings overall, but it will give you a quicker psychological boost. Once that is paid off, add the money you were paying to the next debt. Repeat this until all debts are paid off. Also, I’m really only talking about credit card debt, which is a large enough problem for most people. However, you can also use this method to pay off your car or house early and save thousands in interest.

Tip number five on how to get out of debt. Contact the companies you owe money to. Ask them to reduce your rate or even balances. Tell them you have accumulated a large debt and without some help, you may have to file bankruptcy (only say this if it is true) or just tell them at the current pace they won’t be paid off for thirty-six years. You’ll find some that are willing to work with you. Personally, I would want to pay off my entire debt, and a lower interest rate would be most attractive. But some people are hundreds of thousands in debt, and with out some reductions, they just aren’t going to get ‘er done.

Tip number six. Be patient. Although, you can get into debt faster than you can say, “Charge it!” It can take a long time to get out of debt. If you have $20,000 of debt and are able to pay about $350 per month, it will take about six years to pay it off. This assumes the interest rate isn’t all that high.

Tip number seven. Be diligent. Put the extra savings towards the debt. In addition, when you get tax refunds or bonuses you can accelerate getting out of debt by putting some of that towards the debt.

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