6 Top Tips on How to Get out of Debt Forever [2019 GUIDE]

Debt may feel like a black hole from which there is no escape. You feel alone and perhaps embarrassed. It may seem like it’s too late, but IT IS NOT TOO LATE! There is an escape and you’re not alone.

Don’t leave this page if you are serious about finally getting out of debt once and for all.

We have helped thousands of readers who were in debt over the years, helping them to better organize their life and their finances, to see the light at the end of the tunnel and, to prevent ever getting in this situation again. We have helped with everything from credit card debt, medical debt, IRS debt, student loan debt, and more. Just last week alone, we received an email from a reader in Alabama who got rid of $122,819 in debt.

If you’re in debt and you’re in need of guidance, then follow these 5 simple tips for getting out of debt forever. You owe it to yourself and your family to read this entire article. Take action!

If you are more than $10,000 in credit card or medical debt, you qualify for the free helpline used by over 290,000 Americans every year. Here is the free helpline number to call right now: 1 (877) 387-8831

It’s free to call, confidential, and will put you in touch with an experienced debt advisor who can help you eliminate credit card and medical debt.

Start Here

Before we tell you exactly how to get out of debt, there are a few simple steps you need to take. It’s crucial to know how much debt you have; how much you can afford to pay off; and if there will be any change in circumstances. Most debtors go into this blind because they don’t want to see how bad things have gotten. But that will only cause more problems further down the line.

  1. Your Debt: Your first step is to calculate all of your debt, everything except for your mortgage. This includes car loans, student loans, credit cards and any other debt. The figure you arrive at is the hurdle that you will need to scale if you are to make it back into the black. Write down everything you owe on a blank piece of paper.
  2. DTI Ratio: Once you have your total debt then you need to work out your Debt-to-Income  ratio. This essentially tells you whether or not you can afford to pay that debt off. You get this amount simply by adding together your total yearly income and then comparing it to your debt. If you earn $50k a year and your total debt is $100k, then the ratio is 2.0. If the income is $20k and the debt is $10k, then it’s 0.5. So, your debt divided by your yearly income. Write it down!
  3. Prepare: Your ratio is the only real way of understanding just how deep in debt you are and just how serious your situation is. Anything at 1.5 and below is acceptable. It’s not great, but it’s a reasonable target. Anything that is 2.0 and above is going to require more effort on your part, but it is worth it! Today is the day you take action.

Don’t worry if your ratio is high because all debt can be cleared. It’s just a way of showing you how severe your situation is and how much trouble you will be in if you don’t start doing something about it today.

You should always understand where you are with your debt, how much interest you are paying and how much you owe. The same goes for your income and your expenditure. Keep records of everything, write everything down and track every cent.


  1. Lose the Bad Bad Habits

We recently advised someone who thought he was doing all he could and was quite proud of his endeavors, but wasn’t getting anywhere. When we asked him to jot down the things he was most proud of, he told us about the time he set aside $50 after winning a bet, and the time he decided not to drink that weekend and used the $30 he would have spent to pay toward his debt. The problem, we informed him, was that those habits existed in the first place.

He didn’t factor drinking, gambling or other habits into his debt because he didn’t see them as an issue. But these little hedonistic habits can eat into your finances. If you want to commit to paying off your debts, then it’s time to cut back on the things that hurt them. You don’t have to live an ascetic lifestyle. It’s not about either extreme, it’s just about finding a balance:

  • Gambling: Most gamblers lose, and even if they are gambling under $100 a week, they will still lose several thousand over the course of the year.
  • Smoking: If you’re smoking 10 cigarettes a day, that’s over $1,000 a year.
  • Drinking: If you drink just a 4 beers on Friday and then again on Saturday, that’s $620 per year if you drink store-bought and over $2,500 if you drink in bars!
  • Eating Out: Americans love to eat out and we spend more on bars/restaurants than we do on groceries. We spend over $3,000 per year on average and while you don’t have to lock yourself in your home completely, you should look to cut back on this spend. Make it a monthly treat at the most.

If you’re a moderate gambler, a smoker, a weekend drinker and someone who enjoys eating out, then abstention could save you over $5,000 a year. Think about how much easier your life would be if you had that much extra money in your bank account every year.

  1. Develop Good Habits

Once you get rid of the bad habits, it’s time to start developing some good habits.

There are cheaper alternatives for everything. Instead of gambling at the casino, enjoy a few games of cards with friends, betting for cents instead of dollars. Instead of eating out, go for a picnic. If you smoke, try cutting back, vaping or stopping altogether (it will save you a lot more in the long-run). As for drinking, reduce the number of days you drink and the amount that you drink, or just tell your friends you’re broke and hope they’ll buy you drinks all night.

It’s not just about changing the way you let loose or get your fix. There are other changes that you can make to start improving your finances and decreasing your debt, including:

  • Use Cash: We’re all being told to “go paperless” these days. Partly because it helps the environment, mainly because it’s much easier for the financial intuitions that are making those statements. But it’s so easy to spend when everything is virtual and your money is just a series of numbers on a screen. Instead, take out cash every day and use that to spend when you’re out and about.
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    Stop getting out your card, stop putting things on credit and start paying in cash. You might not flinch if you have to hand over hundreds of dollars on a credit card, but you’ll have a heart attack if you have to do that with cash.
  • Stop Investing: It’s good to invest, and if you are self-employed then it’s essential. However, if you’re a contracted employee and you’re in debt, then you need to stop. There are a time and a place, and this is not it. You invest so you can make small gains over the long term, but if you’re in debt, then every small gain you make is negated by a huge interest payment you pay elsewhere. In the long-run, you’ll save a lot less using additional income to pay off debt than you would be using it to invest.
  • Stop Using Credit: You can’t use cash all of the time and cards will be needed sometime. But you need to avoid using credit cards at any cost. The same goes for store cards and any other finance plans. They are designed to make you think less about spending big, and that’s a one-way ticket to disaster.


  1. Sell Up

We can’t tell you how many times we’ve worked with customers who are up to their elbows in debt, with the debt collectors just weeks away, yet they are sitting on a goldmine in assets. They refuse to sell until it’s too late, at which point their prized assets are taken away in an undignified manner and they get less than half their value.

You should start steadily selling off your possessions to help with repayments and to eat into that debt. It should not be an act you save for when you’re desperate. There are the two major groups of possessions that people have and can consider selling, each tied to a different level of debt.

Minor Possessions — Lower Level Debt  

  • Games/DVDs: Many of us play video games, get tired of them/complete them, and then leave them to gather dust. They form part of a collection that we keep so we can show it off, and on the off-chance that we suddenly get a desire to play them again. This never happens. So, sell up and use that money for good causes. The same goes for DVDs, but these tend to be watched again and they don’t have as high of a value.
  • Sporting Equipment: The average American has all kinds of unused sport and fitness equipment, from complete home gyms and golf clubs to weights, boxing bags, treadmills and more. If they don’t get used, then sell them.
  • Musical Instruments: If you don’t know how to play guitar but you have a guitar sitting untouched in the corner of your room, then it needs to be sold. We’ve all been through that stage, don’t worry. Just make sure you get some cash back from your failed dreams of rock stardom.
  • Kid and Pet Toys: Kids get a lot of toys bought for them and they don’t play with most of them. They outgrow them quickly and they end up taking up room in garages and basements. Just sell them. You might not get much, but you’ll clear some space. The same goes for pet toys that are unused. No one wants scraggy chew toys, but cat laser toys, cat trees, dog cages—that stuff can find a home.
  • Jewelry: If you have a fancy collection of wrist watches, earrings, necklaces or anything else flashy and valuable, then you need to think about selling up. They won’t do you any good when you’re preparing to declare bankruptcy and facing the genuine threat of losing your home/business, but they may be able to stop that from happening if you’re willing to let them go.

Major Possessions — Serious Debt

  • Car: If you have a flash car that you’re still paying off, then it’s time to consider selling up. You can save a fortune on repayments and insurance. If it’s a second car and you’ll still have a runaround, go for it. If you need a car to get to work, then simply consider downgrading. You can sell your high-priced credit destroyer and then buy something simpler. At the very least, swap a gas-guzzler for someone economic.
  • Computers/TVs: If the debt collectors are about to come knocking, then get rid. A computer that cost $1,000 new a year ago can still be sold for $600. But if they take it away, you’d be lucky to get $300 off your debt. Look for old games consoles, laptops, PCs and additional TVs (as long as you have one, the rest are superfluous).
  • Heirlooms: If you have a precious and incredibly valuable item that has been handed down through the family, then you need to think about selling it. It sounds like a cruel and heartless move, but you have to ask yourself, would your family want you to cling onto that small piece of material wealth and risk financial ruin, or would they want you to sell it to help you clear your debts and make your life less stressful?

Don’t forget to give the helpline below a ring. This is a genuinely helpful, 100% free service that you can use any time of day to help you get through this difficult period in your life.

  1. Reduce Your Bills

We once worked with a man who had lost his job unexpectedly, before suffering from a medical complaint (and the bill to go with it) and then getting lost in a downward spiral of debt. His outgoings were considerably more than his incomings because he was relying on welfare and food stamps, as well as his wife’s wage.

He delayed getting in touch with an adviser because he thought that all hope was lost. But it took a single conversation to turn things around and within a couple weeks he was on track to clear his debt. His case is not unique either, as may debtors miss the obvious. All of the following mistakes are far too common, both with this customer and with many other debtors across the United States:

  • Forgetting to Consolidate: Consolidating your loans is a must in all cases. There are a wealth of specialist loan companies and information out there so there really is no excuse not to do this, yet so many debtors don’t. In the simplest terms, a consolidated loan is a single low-interest loan that you use to pay off all of your other debts. That way you can focus on one repayment and one debt while saving a fortune in interest payments.

To learn more about this process and to understand what sort of interest rate you can qualify for, ring the following free helpline (available 24 hours a day, 7 days a week):

1 (877) 387-8831

  • Keeping up Luxury Repayments: The man in the above scenario had a swimming pool in his back garden and he also hired a nanny to look after his kids on the weekend so he could spend time with his wife. When we calculated how much he spent on that poll and that nanny, and how little use he got out of them, he nearly had a heart attack. If you’re in debt then you don’t need staff, heated pools or anything of the sort.
  • Keeping Up Superfluous Repayments: If you just laughed at the heated pool comment, thinking that you’d never do anything so reckless, then maybe you need to think again. Many debtors will happily sell half of what they own while not even considering the fact that they’re paying a fortune for TV channels, the internet, gym membership, golf club membership, etc., By all means keep the basics, but don’t stretch the definition of “basic” just so you can avoid missing the latest Netflix series or so you can keep up with your friends at spinning class.
  • Not Getting a New Supplier: Insurance and utility bills steadily increase while customers stagnant. We don’t take the time to change providers because we don’t think it will make a difference, but it can save hundreds of dollars a year.
  • Not Changing Credit Card Provider: Many credit card providers will give you 0% interest on a set number of months, while also offering free balance transfers. What’s more, you don’t need to stay with them after that free period has finished. So, switch your balance from your current provider to a 0% interest one and when that period ends, simply switch again. Of course, you also need to avoid the temptation to spend more money—remember, that’s what got you into this mess in the first place.
  • Make Sacrifices: To avoid complete financial disaster, you might have to make a few sacrifices. After calculating your ratio and determining just how much trouble you’re in, you may discover that you need to cancel upcoming holidays, cash-in college funds and savings accounts, and generally do what it takes. This should not be seen as a last resort and hit rock-bottom, but rather as the beginning of your journey toward a debt-free life.

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    1. Be Open

    Finally, if your debt is serious, to the extent that every cent really does matter, then make sure you’re open with friends and family. Too often we work with people who are in serious debt, but they still act like everything is okay with friends and family, spending money on days-out, lavish Christmas presents and more. They are embarrassed, and that causes them to sink further into debt.

    If your friends and family know that you’re going through financial struggles then they will be more inclined to offer their help. You may be too proud to accept this right now, but when the debt collectors come knocking and you need a few thousand dollars to stop them taking your prized possessions, then that pride will go out the window.

    They will be more understanding if you turn them down for nights on the town, holidays and other expensive outings that you just can’t afford. You should also discuss these things with your children. In the US, spending over the holidays tops $1 trillion. Each adult is estimated to spend over $400 on holiday-related items (including trinkets, clothes, and booze) and close to $1,000 on gifts. If you have kids, then you’re probably used to blowing extortionate amounts of money on them, while also spending big on nieces, nephews, grandkids and the children of every friend and neighbor.

    This needs to stop. So, tell your kids that you’re cutting back. Make an agreement with your partner and close family that no gifts will be exchanged and do the same with close friends. Use Secret Santa programs to avoid spending too much in the workplace (you can even set up something similar with an extended family or group of friends) and get your neighbors a card instead of presents.

    You can save in excess of $1,000 by cutting corners, an amount that increases significantly if you have children and a large family.


    BONUS TIPS (generate more money):

    Ready to tackle that credit card debt? Initially, you must come up with a plan to reduce your spending – but after that, how about taking a more proactive approach by generating additional income?

    If you can find a little bit of extra time to implement a few simple ideas, you’ll get some extra cash to help pay off those debts faster. So turn off the “Seinfeld” reruns, forget about your Facebook page for a moment, and follow these five tips to become a member of the debt-free club:

    1. Sell Your Stuff

    If those old college textbooks and last season’s clothes are still sitting in your closet, clean them out and turn them into cash. Old electronics such as digital cameras, GPS systems, and cell phones are a great place to start.

    You can open a seller’s account on eBay, or to get better bang for your buck, consider selling on Craigslist which is 100% commission-free. Ship your items quickly and package them securely – and with Craigslist, always meet in an open, public place and accept cash as your only method of payment.

    2. Complete Paid Online Surveys

    You’re unlikely to hit it rich by filling out surveys, but every little bit helps. Payouts from some of the online survey websites are around $2 to $3 per completed survey, which usually take about 30 to 45 minutes to complete. If you’ve got some downtime at night, this can be a low-stress way to make a few extra bucks. Just be sure you’re dealing with a reputable website, such as Lightspeed Research and Pinecone Research.

    3. Start Your Own Business

    Starting your own business is a great way to bring in some extra cash. For instance, you may want to consider launching a consulting business. Pick a subject you’re well-versed in, print some business cards, and advertise your services on social media websites like Facebook and Twitter. You never know – it may blossom into a full-time gig.

    4. Participate in Paid Focus Groups

    To participate in a paid focus group, you most likely need to live in or near a big city – however, if this is an option, the payouts are tremendous. When you sign up at a website such as Delve or Focus Pointe Global, questionnaires are periodically sent to your inbox.

    If you meet the qualifications, you will be invited to participate in a paid focus group. It could be a roundtable discussion or a group study in which you answer questions on a response pad. You can make $50 to $75 for each hour of your time.

    5. Rent Out Your Car

    This may seem like a scary thought, but the website RelayRides has taken the fear out of the equation. You decide your price, approve the people who rent your car (after they’re pre-screened), and RelayRides is responsible for insuring your car. According to the website, you can earn as much as $1,000 per month. If your car is just sitting in the garage, put it to work for you.

    Final Thoughts

    If you find yourself with a significant amount of cash after implementing these ideas, stay disciplined and be sure to apply it to your debts. The sooner you get out of debt, the sooner you can resume your normal lifestyle. If you happen to find great success with these strategies, keep them going. Your retirement savings or your child’s college education will feel like less of a burden if you get ahead of the game.

    What other ways can you think of to generate cash?

    [image via flickr]