7 Ways to Help You Come Out of Debt

1. Track spending

Use budgeting software or keep a manual tab on your spending to get a clear picture of where your money is going. Determine where you can make savings.

2. Record debts

Make a list of all of your debts, together with the interest rates, minimum payments, and balances. Sort them into high- and low-interest categories (credit cards, for example).

3. Debt repayment strategy

Choose a strategy for paying off your debts. The debt avalanche, which prioritizes high-interest loans to reduce interest costs, and the debt snowball, which concentrates on paying off the smaller debts first for psychological gains, are two common strategies.

4. Create realistic budget

Create a budget that allocates adequate funds for necessities, minimum debt payments, and additional payments toward the debt of your choice.

5. Increase your income

Look for ways to increase your income by taking up side projects, working for yourself, or asking for a raise. This can speed up the repayment of your loan.

6. Decrease expenses

Look for places where you can minimize costs, such as entertainment, subscriptions, and eating out. Every cent you save goes toward paying off your debt.

7. Make more than minimum payments

When paying off your chosen debt, try to provide more money than the minimum. This expedites payoff and drastically lowers the overall amount of interest paid.