4 Ways to Get Out of Debt Fast (+ mistakes to avoid)

Cut
up
your
credit
cards

Credit
cards
aren’t
inherently
evil
like
some
people
think.
They
can
be
a
useful
tool,
but
right
now
they’re
no
good
to
you
if
you’re
in
unmanageable
debt.

While
you’re
clearing
debt,
the
number
one
mistake
you
want
to
avoid
is
adding
to
that
debt.

Some
people
get
into
the
mentality
that
the
more
they
pay
off,
the
more
they
can
put
right
back
on
that
credit
card.
Don’t
do
this!
You’re
just
making
it
so
much
harder
for
yourself.

Instead,
you
need
to
say
goodbye
to
those
credit
cards
and
create
a
spending
plan
that
does
not
involve
relying
on
them. 

Create
a
practical,
sustainable
budget

If
credit
is
a
necessary
part
of
your
day-to-day
budget,
that
needs
to
stop
right
here. 

It’s
definitely
easier
said
than
done
if
you’re
used
to
relying
on
debt,
but
with
a
practical
budget,
you
can
start
to
claw
back
some
control
of
your
money.

Step
one
in
creating
a
budget
is
to
do
a
full
look
at
your
income
and
outgoings.
What
cash
do
you
have
to
work
with?
What
are
you
spending
and
where
can
you
cut
back
comfortably?

There
are
all
sorts
of
budgets
out
there
you
can
try.
I
like
the 50/30/20 one,
which
allocates
50%
of
your
income
to
needs
(e.g.
rent,
insurance,
groceries),
30%
to
wants
(fun
stuff,
yes
you
can
still
have
fun
on
a
budget).
And
then
there’s
20%
to
savings
(retirement
accounts,
vacation
fund). 

If
that
one
doesn’t
work
for
you,
find
one
that
does.
Remember,
for
a
budget
method
to
work,
it
needs
to
be
right
for
you.
It
needs
to
be
sustainable
long-term. 

That
means
you
don’t
want
a
budget
that
forces
you
to
give
up
everything
you
love,
because,
let’s
face
it,
you
won’t
stick
to
it. 

Should
You
Consolidate
Your
Debt?

At
some
point,
you’ve
probably
considered

consolidating
your
debt.
There
are
a
few
benefits
to
this:

• It
  makes
  managing
  all
  your
  debts
  simpler
• You
  can
  save
  on
  interest

If
you
have
several
credit
cards
or
personal
loans
with
high-interest
rates,
it
can
make
sense
to
take
out
new
finance,
pay
off
all
your
debts
and
leave
yourself
with
just
one
debt
to
manage. 

But
there
are
two
key
things
to
remember. 

Consolidating
your
debt
is
only
worth
it
if
you
can
save
money
on
interest.
Moving
to
a
loan
with
higher
interest
rates
is
going
to
leave
you
in
a
worse
position,
even
if
it
makes
managing
it
simpler. 

Also
remember,
taking
out
more
finance
doesn’t
mean
you
can
now
spend
more.
Don’t
make
the
same
mistake
some
people
do
when
they
take
out
a
brand
new
loan,
pay
off
debts
and
then
dump
another
big
purchase
on
a
credit
card.

Debt
consolidation
loans
are
yet
another
debt,
remember.
It’s
not
a
ticket
out
of
debt
unless
you’re
serious
about
clearing
it
and
staying
out
of
debt.

Avoid
These
Mistakes
When
Paying
Off
Debt

Want
to
clear
debt
and
stay
out
of
it?
Make
sure
you
avoid
these
common
mistakes.

1.
Keeping
the
same
old
habits

If
your
spending
plan
involves
credit
cards,
payday
loans,
and
relying
on
credit…you
guessed
it.
That
needs
to
stop.
You
can’t
stick
with
the
same
old
habits
because
it’ll
be
so
much
harder
to
dig
yourself
out
of
debt. 

Things
need
to
change.
A
debt
repayment
strategy
is
only
part
of
the
work.
You
need
a
practical
budget
and
a
sustainable
spending
plan.
Changing
habits
is
never
easy
and
there
will
be
an
adjustment
period,
but
it’s
worth
it
to
be
free
from
debt. 

2.
Not
asking
for
help

Most
people
try
to
go
it
alone.
Maybe
that’s
because
of
the
“I
got
myself
into
this”
mindset
or
they’re
a
bit
embarrassed.
Whatever
it
is,
you’re
not
doing
yourself
any
favors.

If
you
have
unmanageable
debt,
one
of
your
first
calls
should
be
to
your
banks
or
lenders
to
try
and
reduce
that
interest
rate.
This
is
a
simple
way
to
get
help
and
if
they
say
yes,
you’re
one
step
ahead
than
you
were. 

Another
way
you
can
get
help
is
to
call
a
credit
counseling
service
and
get
some
advice.
Credit
counselors
are
trained
to
offer
debt
management
programs
and
advice
that
can
make
all
the
difference.
They
can
also
help
you
set
up
a
budget
to
avoid
future
debt.

3.
Making
only
the
minimum
payments

Making
only
the
minimum
payments
on
all
your
debts
is
a
common
mistake
people
make
because who
wants
to
pay
more
than
they
need
to?

The
truth
is,
you’re
actually
paying
more
by
avoiding
those
higher
payments
each
month.
All
it
does
is
prolong
the
debt
and
increase
the
amount
of
interest
you
need
to
pay. 

Try
to
make
more
than
the
minimum
payments
on
at
least
one
of
your
debts.
You
could
save
so
much
over
the
course
of
your
loan
in
interest
alone!

A
life
of
debt
doesn’t
have
to
be
your
reality.
If
it
always
feels
like
you’re
clawing
your
way
through
debt,
there
is
a
light
at
the
end
of
the
tunnel. 

But
don’t
do
what
so
many
people
do
and
try
to
ignore
debt.
The
fastest
way
to
get
rid
of
it
is
to
face
it
head-on,
come
up
with
a
strategy
to
pay
it
off,
and
have
a
budget
to
avoid
it
in
the
future. 

FAQs
About
How
to
Get
Out
of
Debt
Fast

What
happens
if
I
can’t
pay
my
debt?

In
some
cases,
your
debt
review
repayment
may
be
subject
to
legal
action
from
your
creditors,
or
you
may
have
your
debt
review
court
order
completely
terminated.
In
the
event
that
you
can’t
pay
your
monthly
debt
installment
or
miss
one
payment,
additional
legal
fees
may
also
be
added.

Can
I
get
a
job
while
under
debt
review?

Debt
review
is
a
voluntary
process
that
allows
you
to
get
help
with
your
finances
and
debt
problems
in
order
to
avoid
bankruptcy.
It’s
important
to
understand
that
debt
review
won’t
impact
your
employment
in
any
way,
so
if
you’re
under
debt
review,
you’ll
still
be
able
to
get
a
job
if
needed.

Do
employers
know
if
you’re
in
debt?

Credit
checks
are
a
common
part
of
the
hiring
process.
Employers
use
credit
report
information
to
verify
their
job
candidates’
identity,
and
they
may
also
look
for
signs
of
excessive
debt
or
past
financial
mismanagement.

In
fact,
many
employers
perform
credit
checks
on
all
new
hires
even
for
positions
that
don’t
involve
handling
money
or
financial
transactions.
Some
employers
feel
that
this
practice
can
help
them
avoid
hiring
people
who
have
a
history
of
financial
problems
and
might
bring
those
issues
with
them
to
work.

Let’s
not
leave
it
there
though.
Debt
repayment
should
be
just
one
part
of
your
financial
plan.