The Simplest Ways to Begin the Journey Out of Debt 

Debt – it consumes so many, it turns lives upside down and can strain relationships, it’s damaging and stressful, but despite this, it is possible to turn it around.  Of course, calling the process of getting out of debt “simple,” is a misnomer.  It’s rarely a simple feat to climb out of the pit of debt, regardless of how one got there, whether it’s through overwhelming medical bills or poor financial decisions.  However, there are plenty of ways to simplify the overall process, ways anyone can begin to take the first small steps to pull themselves up.  It can start with smarter, well-thought out decision-making and planning.  It can also be a look inward, a personal quest to understand one’s financial relationship with the world.  This applies to both those who made all the right choices, but found themselves in a difficult position (such as a medical emergency) and those who made poor decisions and overspent beyond their means. 

So, where is a good starting point?  The answer can ultimately depend on the severity of the debt, but here are suggestions that can offer that “first step.” 

Credit Counseling

General speaking, the purpose of credit counseling is to develop a plan to get out of debt.  This can include creating the closing of multiple credit accounts consolidating them into on, significantly more manageable account (debt consolidation).  Additionally, there also may be a reduction in interest rates.  In any case, the focus is on creating a structure in which the person in debt can deal with their debt on updated terms, ultimately making managing their debt a realist prospect.  Keep in mind, however, that when considering credit counseling to research potential services before signing anything.  As questions such as: is the company reliable? Do they care about the customer or do they just want to make a sale.  A great way to find a reliable service is to look at the credit counseling services available in your area and look them up online, both through the Better Business Bureau and through other general online searches. 

Curb Spending

You’ll see this on every list of tips to get out of debt, or at least, you should.  It’s the most obvious thing you can do.  To start, you need to know where your income is going.  How are you spending it?  It likely includes the basics, such as food, housing, and fuel.  It doesn’t matter how much debt you’ve incurred.  By making change to how you spend—for the better—it will have a positive impact on your financial situation, even if it’s small. 

Develop a Budget

You may have had a budget in place before going into debt, but guess what?  It’s time to make a new one to reflect your current situation.  Go over your bills and find where you can make changes.  It won’t always be easy—in fact, it probably won’t be—at all, but it’s absolutely critical to create a budget as closed to balance as possible.  In doing so, it may require you to make changes to your lifestyle, which leads into the next point.

Reduce Excess

Live in a home or apartment that eats up too much of your income or is otherwise putting you under financial strain? It may be time to move.  The same can be said about other aspects of your life as well, such as your automobile and other toys you may have (ATVs, boats, campers, etc.).  In a dire financial situation, getting rid of this excess can be helpful.  Again, making the change isn’t going to be easy.  Moving and selling your excess belongings can be time consuming, and in the short term, the benefits might not be apparent.  The long term, however, is where you’ll see the benefits.  A reduction of excess, which leads to a reduction in overall spending, coupled with a new budget reflecting your evolving financial situation can have nothing but a positive impact—even if it’s very minor. 

Keep in mind, all these tips go hand in hand, but since all debt situations are different, there isn’t a one-fix solution.  If you think you need help, the earlier you start, the better of you’ll be.

About the Author: Domenic Holme is a finance specialist and freelance blogger who specializes in debt consolidation and debt relief.