There is one little four-letter word that can instantly throw chills down your back. It makes you want to hide and pretend it doesn’t exist. What is that little word? That’s right… debt. (Did you shiver?)

But there is good news! You can get that four-letter word out of your vocabulary and never speak of it again! “How?” you ask. Here are six steps you can take to become debt free.

1. In order to get out of debt, you must stop accumulating debt.

You can take this action step right now. Pull out every credit card you have in your wallet and place them on the table. Get a pair of scissors and do a little “plastic surgery.” If you feel that it’s necessary to keep one card for things such as traveling, put that card in a safe place and access it only when necessary.

2. Make a complete list of your debt.

Include the name of the lender (who you make the payments to), the interest rate, the total amount due, and the monthly minimum payment. This step is quite possibly the hardest step to take, and it brings perspective to the overall amount of debt a person may have. It causes a person to face reality, which is sometimes cold and hard. For others, they may realize they don’t have as much debt as they thought.

3. Prioritize the listing of debt based on the order you want to pay off the debt.

For example, you may want to pay off the smallest debt first, then the next smallest, and so on. An alternative way is to prioritize by interest rate, listing the piece of debt with the highest interest rate first, then the next highest rate, and so on.

4. Establish a goal of when you want to be out of debt.

Based on that goal, calculate the needed monthly payment on each piece of debt. Great online debt-reduction calculators exist to assist in helping you calculate when you will be out of debt and how long it will take.

5. Incorporate the monthly payments into your budget.

This is a key step as you want to be sure you have the money to make the payments on your debt and be able to meet other financial obligations during the month. This step will also allow you to increase or decrease your debt payments as you balance your budget.

6. Stick to your budget and do not miss a monthly payment.

Continue to work hard toward not accumulating extra debt and track your progress. Each month take an attitude with your debt balance and tell it, “You’re going down!”


The steps to becoming debt free are actually quite simple. However, it will take solid commitment and stamina to see the plan through. You can do it, and will soon experience the incredible freedom of having no debt.  Are you ready to take on the challenge to becoming debt free?

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One Response to Getting Rid of That Little Four-Letter Word

  1. Teri Centner Teri Centner says:

    If you don’t count mortgage, I’m close to debt free. :)

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