Getting Out of Debt

Consumer debt is at all time highs and the interest on carrying large amounts of debt is very expensive. Carrying less debt is something that every household should strive for. This guide is a guide about getting out of debt.


March 18, 2010 Flag
25 found this helpful

Years ago, a good friend of mine and I were discussing finances. I was a newly single mom, and was feeling overwhelmed by the prospect of trying to pay my bills. My friend told me how she handled those bills that are payments (not regular monthly bills, but things like furniture payments, car fixits, medical bills, car payments, etc.). By organizing and paying them as follows, you will be surprised how quickly they can be paid off!

First of all, figure out your budget. How much is each payment? List the debts in order from smallest to largest. Make payments to each, EVERY month. List the following information:

Do this for each bill.

  1. Make the largest possible payment to the first bill (which has the lowest balance), as well as the normal payments for the rest of the bills. As soon as that first bill is paid off, draw a line through it and mark it as paid. Psychologically, that is a real boost to see the progress you're making.

  2. Now apply THAT payment to the next bill on the list, in addition to the regular payment. (Example: If you are making $25 payments on each of five bills, and you just paid off the bill at the top of the list, now apply THAT $25 payment to the second bill. Now the bill at the top of the list (in this case, No. 2), is now getting $50 per month, and the rest are still getting $25). Because the payment is currently double, obviously that bill will get paid off more quickly, and you can cross that one off.

  3. Repeat this pattern down the list, now that two are paid off, the next bill payment for Bill Number 3 is $75. By being disciplined in paying the bills in this fashion, you will be surprised how quickly you can knock off these bills and how much faster your stress level drops!

By paying the bills in this way, when one is paid off, you can make progress very quickly on the list of bills, without changing your budget/spending. It's very easy when a bill is paid off, to simply incorporate that money into the spending. By exercising discipline in paying the bills off in this way, when you get all the bills paid off, you can now put the money into savings, which was previously spent on these "one-time bills!

I hope this system of bill paying helps others who are struggling with finances! I have found that most people are good about working with a person if they receive regular payments. This way, everyone gets a little something, and the top bill on the list gets the most. By the time you get to the bottom of the list, you can make a hefty payment instead of the $25 (or whatever) you previously were able to make! Good luck!


Source: Another single mom struggling to make ends meet!

By Bzladi from Storm Lake, IA

June 25, 20120 found this helpful

I also used this method 20 years ago to get out of debt. I still use a credit card but I pay the balance in full each month so I don't incur a finance charge. One additional item to consider is putting the bills in order by the size of the interest rate. If you start paying off the highest interest rate bills first you will be saving more money in the long run.

ReplyWas this helpful?Helpful? Yes

July 28, 2006 Flag
0 found this helpful

Friends and family have called me a tightwad or a cheapskate. I prefer to be called "frugal"! About 12 years ago, my husband and I came to the bright conclusion that we had too much debt (after only 3 years of marriage!)

Comment On This PostWas this helpful?Helpful? Yes

June 23, 2006 Flag
1 found this helpful

I am looking for ideas to get out of debt. I ran across a little plan to get out of debt that really works if you just stick to it.

Getting Out of Debt, Picture of a woman cutting a credit card.

Comment On This PostWas this helpful?Helpful? Yes

January 10, 2006 Flag
Shaunta Alburger0 found this helpful

Shaunta Alburger has agreed to write articles for ThriftyFun. This is Part 1 of a 4 part series she has written about her plan to go on a Debt Crash Diet in 2006.

Comment On This PostWas this helpful?Helpful? Yes

September 19, 2007 Flag
0 found this helpful

I hope someone can help me with my problem. I am deep into debt and I would like to know if someone could guide me with a very basic easy way to get myself out of this ordeal. I have tried everything that i could and still I fall back. I am going to start this week when i get paid to get this monkey off my back. Could suggest a very simple and basic budget or using the envelope method what ever it takes. I don't want any thing that is to complicated right now.

I am looking at about seven thousand in total debt that includes miscellaneous items and credit card debt. I also owe the IRS. What should i do first? I get paid bi-weekly total of 679.86 monthly. Also, I have a second job in retail so that check is not always the same, It goes by the hours I work. Help me please someone.


Malmal from Boston

July 25, 20080 found this helpful

Don't claim bankruptcy. It's not fair to put your bills on others and drive them under too. Pay them off gradually as best you can.

ReplyWas this helpful?Helpful? Yes
April 18, 20160 found this helpful

February 9, 2006 Flag
1 found this helpful

For every day I don't buy a scratch-off lottery ticket, I put the $2 I would have spent on it, and put it into an envelope and as it builds up I take it and apply it to a debt. It seems like found money and feels great making the payments

By Michael McIntosh from Greenwich, CT

February 12, 20060 found this helpful

Another thing to 'not buy' is magazines or candy. Imagine how much that money would add up!

ReplyWas this helpful?Helpful? Yes

April 13, 2014 Flag
0 found this helpful

Can anyone tell me if this is still true? If you owed someone money and they never collect on the debt for the 1st seven years then the debt is null and void (like you had filed bankruptcy against it,) and they can no longer collect money from you?

By Teresa W.

April 21, 20140 found this helpful

Well, - my two cents worth - it sounds to me like your grandfather was a very honorable man and needs to held as a fine example of the type of character we should all strive to be. My kudos to him and anyone like him!

ReplyWas this helpful?Helpful? Yes

March 31, 2005 Flag

We have over $22,000.00 in credit card debt, 2 car payments and can't get rid of them for we owe more than they are worth, a house payment and heloc loan we got when we purchased our home for the down payment, medical bills, and the utility bills.

We have an 18 y/o senior without a car but she works a part time job which is not enough to save for a car, she has a 3.86 grade point average but has not qualified for a college scholarship which she needs desperately.

Bottom line is that we have way more bills than income and are sinking fast. I am married and mother of two. I hardly know them anymore for I work all I can.

The bills are all paid on time so far but I know without a miracle, we will sink . Does anyone out there have an answer that will give us some hope? Your help is much appreciated.

My husband is out of work on medical leave in which doctor will not release him to work at this time. He still has insurance from his job but has used up his disabilty money which has left him with no income but his company is still providing the medical insurance.

I am a nurse and work hard. We are not lazy people but I know we have made bad choices. Thank you in advance for some good advice and your prayers most of all.


September 20, 20090 found this helpful

I hope the original poster reads this &/or it helps others. I am retired from the Social Security Administration last working in the Office of Disability & Review component where judges hear appealed disability cases. This is the Agency that administers the Supplemental Security Income (SSI) program. If your husbands still gets SSI payments, even if the check is only $1, he is eligible for Medicaid health coverage through the state. This pays for everything and includes about 3 or so prescription drugs a month (use this to pay the most expensive or get a prescription for 2 months worth), basic dental care, and basic eye care.

In addition, in most states, if you receive SSI you are eligible for food stamps with the state. Also, if you receive food stamps, you may be eligible for utility assistance (like in Texas electric assistance during the hottest months and phone assistance). Check with the state to see what you may be eligible for. See if your daughter qualifies for a work/study program with a federal agency. For example, these students generally work at entry grade level for a semester and then go to school a semester and also have summer employment. When the student graduates, he/she gets a permanent job offer that student can accept or not. Have her decide what type of career she is interested in, then go to an Agency that does that type of work.

ReplyWas this helpful?Helpful? Yes
October 9, 20090 found this helpful

January 13, 2006 Flag
Shaunta Alburger0 found this helpful

In the book Your Money or Your Life, author Joe Dominguez makes the point that money is really an exchange for your life force. Every dime spent, represents the time and energy you spent earning it.

Comment On This PostWas this helpful?Helpful? Yes

September 8, 2008 Flag
Kelly Ann Butterbaugh0 found this helpful

The average American credit card debt is over $5,100. While it may not seem like it, this balance is manageable. Within three yeas it can easily be paid off provided that new charges are not added to the debt.

Close up of Credit Card

Comment On This PostWas this helpful?Helpful? Yes

June 3, 2010 Flag
0 found this helpful

My income is cut in half. My credit card bills are overdue. They are calling all the time and I don't have extra money to pay them. How do I start climbing out of this hole that I am in? I can't get a second job; I have tried! I can't even sell the family heirlooms. I am scared and worried! Any advice?

By Lynette from Ann Arbor

June 5, 20100 found this helpful

Each city usually has a free company who will help you get out of debt. I went to Consumer Credit Counseling in Houston, Texas USA.

You bring everything with you regarding your debt, plus a list of what you spend things on, even stamps and magazine subscriptions, hair cuts, etc. Then CPA's, financial people give of their own time freely to put you on a schedule. They'll contact your creditors and will help and encourage you.

Make sure it is free. Do not, please please, go to these companies who advertise that they will 'make your debt go away'. This usually involves personal bankruptcy and you don't want that, for a lot of reasons.

If you file bankruptcy that means that You purchased items and didn't pay for them. That is stealing and you don't want that in your life, do yourself a favor!

Good luck, dear. It may seem like you'll never see the light of day, but believe me, with this kind of help, you will. Do you believe in God, or a Supreme Being? Pray, pray, pray. You'll be doing your part by getting help, but the miracle of the success will come from God, believe me. Pray that He will take away your fears and give you His peace.

Fear will paralyze you and you sound frozen. There should be an organization in your city where other people who are/were in debt can all talk together, share ideas, comfort you.

Also, and this is brutal, look inside yourself and determine what you did to get where you are. Self examination one of the hardest thing to do, but you have to find out how you got where you are so you won't find yourself there again. You must become accountable for your actions and make restitution for yourself and whoever your debt has touched and effected other people's world.

Many organizations, churches offer free counseling. Working with a non biased person will help you. You can say whatever you want and you will have to be very brave, in order to get to the core of what happened. It will help you so much to talk to someone who is in your shoes.

Right now, do whatever you can to save money. I ate a lot of peanut butter and soup. I stopped buying clothes, even though I shopped at Marshalls'.

Thank God I'm out of debt now, but guess what? I still shop at Marshalls and resale shops for clothing, shoes, handbags, etc. I eat peanut butter and soup.

I do not have a credit card, except one that is used in only extreme (car repairs, etc.) circumstances.

God bless you.

ReplyWas this helpful?Helpful? Yes
June 6, 20100 found this helpful

October 28, 2012 Flag
0 found this helpful

Do I really need a credit card? I am a divorced mother of two and wanted to get rid of some debt. Does it make sense for me to have a credit card? I'm wanting to close my credit card and just put money into a savings account.

By Cheryl

Anonymous Flag
October 30, 20120 found this helpful

Google Dave Ramsey. He has a national radio show all about cutting up your credit cards and becoming debt free. It will change your life!

ReplyWas this helpful?Helpful? Yes
October 31, 20120 found this helpful

January 11, 2006 Flag
Shaunta Alburger0 found this helpful

Pre-teens are notorious drama queens. (The girls and the boys equally!) There is no easy way to tell them things are going to change drastically. Giving them a couple of months heads up helps.

Comment On This PostWas this helpful?Helpful? Yes
Load More
Budget & Finance Debt Reduction AdviceMay 17, 2011
Deceased Family Member's Debt
Responsibility for a Deceased Family Member's Debt
Writing a child support check.
Paying Back Child Support
Couple worries About their Personal Debt
Collecting on a Personal Debt
Debt Consolidation Tips
Debt Consolidation Tips
Halloween Ideas!
Ask a Question
Share a Post
You are viewing the desktop version of this page: View Mobile Site
© 1997-2016 by Cumuli, Inc. All Rights Reserved. Published by . Page generated on October 25, 2016 at 4:09:12 AM on in 5 seconds. Use of this web site constitutes acceptance of ThriftyFun's Disclaimer and Privacy Policy. If you have any problems or suggestions feel free to Contact Us.
Loading Something Awesome!