Top Tips to Get Out of DebtReviewAdvice

Top Tips to Get Out of Debt

Getting out of debt takes patience, analytical savvy, financial knowledge and a good dose of personal commitment. If you're currently saddled with debts and can't figure out where to start, taking baby steps to clean up your credit and consolidate existing debts can be helpful. You also should track your spending meticulously, creating a personal budget, and seek the expertise of professionals as varied as financial planners, debt advisers and certified financial managers.

Top Tips to Get Out of Debt

How Do I Check My Credit History?

Checking your credit history is a good way to start getting out of debt. By knowing what's in your credit file, you can determine the total amount owed and the related lenders. Don't worry about paying for a credit report; by law, you're entitled to one every 12 months from each of the top three credit reporting agencies – Experian, Equifax and TransUnion.

Can I Track My Spending Efficiently?

Tracking your spending can help you figure out items on which you tend to splurge as well as those you are doing a good job controlling. You can monitor your expenses effectively through manual intervention, online or through a financial institution. Manual intervention means you write down the cost of everything you buy, keeping receipts and transferring purchase data onto a computer or into a notebook. Online expense tracking is also an effective way, and portals such as Track Every Coin provide free tools to manage personal expenses and access your accounts from anywhere. Banks also provide spending reports free of charge to clients, so talk to your financial institution and learn more about its spending-tracking features.

Who Can Help Me Get Out of Debt?

Various groups can help you get out of debt, giving you valuable advice on your way to financial freedom. Contact your local Better Business Bureau branch to learn about debt management resources available in your area. You also can talk to your state's Department of Financial Services, which can give you a list of businesses and nonprofits that provide debt management advice. If you carry a high debt load, seeking the expertise of a professional, such as a lawyer or certified public accountant, could be a smart move. Other good resources include your state's consumer affairs bureau and members of academia, such as university professors, who often provide pro bono debt management advice.

Do I Need To Create a Budget Plan?

Creating a personal budget to track your expenses and gradually get out of debt is a smart move, similar to what online tools and banking reports do. But this time around you're the one creating the template from scratch and inputting data in it. A budget plan typically has two sides: one for income and the other for expenses. In the income category, list things like salary, earnings from contract work, investment gains and interest from savings accounts. In the expense category, put expenses as diverse as groceries, interest, entertainment, gas and utilities. At the bottom of your budget, calculate your monthly surplus – or net loss, if expenses exceed income. Microsoft also provides free Excel templates to help consumers input and track budget data over time, say, a year or quarter.

Is Consolidation or Settlement Right for Me?

In a debt consolidation plan, a borrower combines multiple amounts owed several lenders into a single debt administered by one creditor. In other words, instead of paying 10 different bills every month, the debtor pays one. In a debt settlement initiative, a borrower makes a one-time payment, usually lower than the initial debt amount, and the lender forgives the remaining debt. For example, the creditor might agree to forgive 40% of the debt as soon as the debtor makes a payment representing 60% of the amount owed. Contact your state's Department of Financial Services to learn more about debt settlement and consolidation agencies, and try to distinguish those that are nonprofit from those that charge a fee for their services.


You can gradually get out of debt by following a five-step plan, making sure to reach out to professionals versed in the subtleties of debt management. An effective debt administration plan includes checking your credit history, tracking your spending, seeking help when needed, creating a personal budget plan, and opting for consolidation or settlement. But getting out of debt ultimately means paying off whatever you owe, be it in small increments or a one-time lump sum. American financial author, debt-help coach and motivational speaker Dave Ramsey says that it's best to attack small debts first before jumping to larger bills.

Last Updated:

Join the discussion

Replying to Cancel

Your comment has been submitted and is awaiting approval from one of our administrators. Thank you for your readership!


Submitting your comment...

Money Saving Blog

Helpful money saving tips and advice so can you save on everyday purchases.

Read Now

Join our newsletter to receive the latest money saving advice, reviews, and offers!

YesI want to learn how to be a smart consumer!NoI'm not concerned about wasting money

100% privacy. We will never spam you.

Where should we mail you our
money saving advice, reviews & offers?

100% privacy. We will never spam you.

Adding your email to our mailing list.

Please wait just a moment

Your email has been added!

Thank you for signing up.


Advertiser Disclosure

In order for MoneySavingPro to remain a consumer free service, many of the companies covered in our industry reviews compensate MoneySavingPro for new sign ups.

However, the results of our comparison tools, the rankings of the providers and the information presented is not affected by compensation. Indeed, many of these companies approach us for an advertising partnership after we have already written a published their reviews.

While we try to research and review as many providers as possible in the 100+ industries we cover, we have not reviewed every company available.

Our rating system is independent of compensation and reflects our true understanding of the industry and the company based on a variety of factors. The companies that receive the highest rating will always be the providers that we believe offer the best value to the consumer.