Best Tips on How to Get Out of Debt Forever

Key Takeaways



Free budgeting app that budgets for you


Debt management plan

Interest rate

The amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed.


If you're in debt and want a way out, you've come to the right place. I'm going to show you how to get out of debt for good by following these six steps.

Create a Budget

  • A budget is a financial plan that helps you manage your money, and it's essential to getting out of debt.
  • What should I include in my budget? You can use an online tool like Mint or YNAB (You Need a Budget), but it's also helpful to keep track of all your expenses by hand or with a spreadsheet like Mooch's free ones. Include all income sources, including any side hustles; then add up all fixed expenses like rent and utilities, plus groceries as well as variable expenses like eating out or shopping online. The result will be an estimate of how much money you have left over each month after paying off debt--this is known as your "spending power."
  • How do I create my own personal spending plan based on these calculations? Once you've got this information down pat, draft up some specific goals for yourself related specifically toward getting out from under those pesky bills once and for all! Write down exactly how much extra cash flow per month would allow us get ahead faster than expected without putting too much strain on our current lifestyle habits.

Stick to Your Budget

The first thing you can do to get out of debt is to create a budget and stick to it. A budget helps you plan for the future and make sure that you're spending your money wisely. It also helps ensure that you don't overspend on unnecessary items, which will only add to your debt load. Our Mooch app is really helpful with this because it does all the work for you, plus you only earn bonuses when you stick to your budget every month.If you want to make sure that your finances are in order, then creating and sticking with a budget is essential!

To create an effective budget:

  • List all of your income sources (such as wages or investments) along with their expected amounts over the next few months
  • List all of the expenses associated with each income source (such as rent and groceries) along with their expected amounts over those same months

Once this information has been collected and organized into categories such as "Monthly Expenses" or "Household Expenses," subtract each category's total from its corresponding income source. This gives us what we need so we know how much extra money we have left over every month after paying off bills etc., which will help us figure out where else we may need more cash flow coming in order for us not only survive but thrive financially!

Find Out What You Owe

The first step to getting out of debt is knowing how much you owe. If you don't know how much money is owed on all of your loans, then it's impossible to figure out what kind of plan would work best for paying them off.

So how do you find out? Most lenders will send an account statement at least once per year listing all balances and due dates, but there are also other ways to gather this information--and many people use them when they don't get statements regularly or at all. Some banks offer online tools that allow users access their accounts at any time; others make paper copies available upon request at no charge (or even provide them automatically). You might also look into contacting customer service representatives directly if none of those options seem feasible for whatever reason; they may be able to help in other ways as well!

Pay Off Your Highest Interest Rate Debts First

The first step is to identify the debts with the highest interest rates. These are usually the ones that are costing you the most money, and should be paid off first.

To calculate your interest rate, divide the amount of money you owe by how much time has passed since you started paying back your loan or credit card bill, then multiply by 100 (e.g., $1,000/6 months x 100 = 16% APR).

Once you know what kind of debt each one represents--credit card versus student loans, for example--you can start prioritizing them based on their cost-to-benefit ratio: how much money could I save if I were able to pay off this particular loan?

Forget the Credit Cards and Put a Freeze on Your Accounts

  • Credit cards are a trap. They're a bad idea for many reasons, but the main one is that they'll keep you from ever getting out of debt.
  • You need to put a freeze on your accounts and stop using credit cards altogether if you want to get out of debt.
  • If you can't do that right now, then at least cut up all of your credit cards so they're not around tempting you when times are tough or when emotions run high (like after having an argument with someone).

Get Professional Helpers in Debt Management

If you're struggling with debt, it's time to get professional help. A debt management plan (DMP) can help you get out of debt fast and forever. A DMP is a formal arrangement between you and your creditors in which they agree to accept reduced payments on all or some of your debts over an extended period of time. In exchange for this arrangement, they will stop trying to collect the rest of what is owed them from other sources such as credit bureaus or collection agencies--and sometimes even forgive some portion of what remains owing!

In addition to providing immediate relief from harassing phone calls from bill collectors, a DMP has several advantages over traditional methods like bankruptcy:

  • It allows people who have good credit scores but still carry high balances due to medical emergencies or job loss access financial resources without damaging their future ability to borrow money at reasonable rates in case another emergency arises again someday (unlike bankruptcy).

Getting out of debt isn't easy, but it is possible

You're not alone. Millions of people are in debt, and it can be a stressful situation. But don't worry: you can get out of debt! The first step is making a plan. It's easy to feel overwhelmed by all the different options out there, but once you narrow down your choices and start making progress, it'll feel great knowing that your finances are in order again. Mooch is an amazing resource for automating your budget and your savings to get out of debt faster.


We hope that this article has been helpful. If you're still struggling with debt and not sure how to get out of it, we encourage you to reach out for help. The first step is always the hardest but once you take it, everything else becomes easier.

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