Cartoon businessman shoulder debt box

Tips on how to get out of debt

Debt can be termed as an amount of money that is owed to a person or company. At times, circumstances force us to get into debt so as to be able to survive while other get into debt in order to finance their lifestyles. Regardless of the reason, being in debt is not a good state of affairs due to the fact that all our income ends up being spent on repaying these debts as opposed to making investments that can help you grow.

The decision to get yourself out of debt is a life changer, because it enables you to be free of your debt obligations, but the thing is that you have to be ready to make the necessary commitment that goes with this change.

Here are some pointers you can use to get out of debt.


One of the first steps of getting out of debt is creating a realistic budget that focuses on all your income sources and all your expenses including debt repayments. A budget gives one a realistic view of their financial situation, identify areas where you can be able to cut back, such as eating out, cable TV, or shopping. One can use the money that they have saved to start paying off the debt.

Prioritize your debt

If you have a lot of debt, it’s definitely a good idea to make paying it off a priority. One can start by organizing your debt by amounts owed, minimum payments you can make, interest rates and what you have coming in. You can also negotiate rates and payments with the people/companies that you owe to solidify your commitment.

Don’t incur more debt

Nowadays, there are too many financial institutions and mobile apps that are giving out loans at the touch of a button. In as much as it might be a tempting prospect when things get hard, avoid incurring more debt as it is a sure way of getting into a debt trap, where one takes a loan to pay off another loan which ultimately leads to a vicious cycle of poverty.

Changing spending habits

When you find yourself being in a lot of debt, it is wise to change your spending habits so as to minimize your expenses. If you have been eating out at lunch consider carrying packed lunch to work which is definitely cheaper. You can also reduce going out with your friends to maybe once a month, one can also explore other means of reducing their spending depending on their expenses.

Side hustle

One needs money in order to be able to clear the debt as such, one can consider taking on a side hustle so as to generate extra income. This could be anything from freelancing to selling items online. The beauty of this is that once you manage to clear the debt, you can now use the extra income to invest in income generating projects that can help you build your wealth.