Skip to content

The Absolute Best Way to Get Rid of Debt

get rid of debtDuring my four years of writing on this blog, I have published a countless number of articles to teach people how to get rid of debt. But, I have recently realized that they are all wrong. In many of them, I have provided the steps of picking out the smallest debt with the highest interest rate, and explained how you can scrounge up the money to start paying those bills and getting out of debt.

While these simple methods might work for some, I have seen a countless number of people pay off some debt, then get deeper into debt, pay off some debt, and then take on some more debt, and the cycle continues again and again. “Why don’t people just do what I tell them to do and get rid of debt?!?” I have often wondered. Just recently, I have discovered the answer: belief. Or, to be more accurate, the lack of belief.

Get Rid of Debt: The Most Important Step

Imagine with me for a second that we are standing atop a skyscraper. It is a bright sunny day, the wind is just a gentle breeze, and we are overlooking Chicago from 600 feet above the busy streets below. The bustle of the pedestrians and the honking of passing motorists are just a faint rustle in the distance. I take a look at you and point to a nearby structure. “Jump to that building,” I instruct you matter-of-factly. “It’s only a couple dozen feet away. I bet you can make it.” Whether you actually can make it is not the point. Your belief is far outweighed by your doubt and fear, so you don’t even consider it an option. Instead, you would probably slap me for even suggesting such a thing and then run back inside where the ground feels a bit more solid beneath your feet.

This is the most important point I was missing in my prior posts. The belief factor. What might seem completely doable for one person might seem like a gargantuan leap off of a skyscraper for another. Let me illustrate this in another way.

Belief vs. Doubt

If I suggest a goal for you, your historical experiences will immediately set the size of your doubts and beliefs in your head, essentially calculating the possibility of you actually hitting that goal. For example, if I said, “Pay off $20,000 worth of your debts within one year’s time,” then your belief and doubts might look something like the graphic below (don’t laugh, I’m a finance guy remember? Not a graphic designer).

Because the goal I set for you sounds mammoth compared to your historical experiences, your doubt levels are actually so big that you can’t even see yourself hitting that goal at all. It’s blocked by the huge wall of doubt that you’ve built up in your head. You might entertain the idea, but in reality, you just know that you’re never going to hit that goal. And, with that mentality, once something minuscule goes wrong with your plans to get rid of debt, you just throw up your arms and say, “Yup, I knew I couldn’t do it,” and you just willing head deeper into debt.

get rid of debt - doubt bigger than belief

Before we even start to think about putting money toward our debts, we must first find a way to increase our belief and decrease our doubts, which actually make our goal possible. Here are some great ways to do just that:

  • Break down the big goal into many small goals to make it feel more manageable
  • Write down your expenses and find what could be cut out of the budget (ie. cable, dining out, entertainment, clothing, etc.)
  • Write down ways that you could earn extra money (mowing lawns, detailing cars, work on a farm, build cabinets, etc.)
  • Find those that are already out of debt and can encourage you along the way
  • Ditch friends that overspend and be sure to limit their influence on you in any way you can
  • Write your next goal where you can see it every day (the bathroom mirror works awesome for this)

When you break down your bigger goals and discover that the next little goal (perhaps paying off a $400 gas card) can be accomplished in less than one month, your belief will shoot up a little bit.

Then, your new friend contacts you and tells you how awesome you are for tackling your debt. She knows you can do it! This pumps you up and your belief jumps a little higher.

A few days later, you pulled a few quotes and made some phone calls and got your insurance lowered by $50 a month! Yes! Your belief moves up a little bit more.

Pretty soon, your goal picture is starting to look a little bit like this:

get rid of debt - when belief gets bigger than the doubts

When you break down your goals into smaller increments and continually fuel your belief, you can very clearly see the task at hand and start knocking out those goals! By focusing on hitting each one of the smaller goals, the larger one will become well within reach!

get rid of debt

Get Rid of Debt: The Second Huge Factor

In order to get rid of debt, you must have belief. However, there is one more important factor as well: the reason. If you want to get rid of debt because you think that maybe you have too much, then you’re not going to do it. The reason just isn’t big enough.

When I was fresh out of college and moved out on my own, my reasons for getting out of debt found me. It was only a couple of hours after I sat down and crunched some budget numbers, realizing that I was getting deeper and deeper in the hole each month. And then, the mail came. I really should have expected it, but it took me off guard; my first student loan bill. Ugh…

I just found out that I didn’t have enough money to survive each month, and then I get this additional bill in the mail for $75? It wasn’t a huge bill, but I knew that I couldn’t pay it! At that point the switch was flipped. Debt was killing me and I knew it. The feeling of debt was unmistakable. It was so powerful that I could often taste its bitter flavor in my mouth. I wanted it gone, and I wanted it gone NOW.

That is a reason.

So what is your reason? Are you sick of living paycheck to paycheck? Are you tired of wondering if your checks are going to bounce when they are deposited? Is it starting to make you angry when you look at your credit card bill? If yes, then you are ready to get rid of debt, and the time to start is today.

Get Rid of Debt: The Rest of the Steps

If you have a reason for getting rid of debt and you build up a belief that you can do it, then the rest of this is just a formality. Sure, it might take some time, but if you keep that fire burning inside of you, then you will absolutely achieve debt freedom. It’s as simple as that!

After all the books that I’ve read in my life about getting out of debt, I believe that Dave Ramsey’s 7-step debt reduction plan is the best. I followed these steps and got completely debt free (yes, I even paid off my house) in about three years. It absolutely works.

1) Save up $1,000 for a temporary emergency fund – Do this any way you can. Have a garage sale, deposit your soda cans, do some work for your neighbor – anything you can do to save up that $1,000, do it, and do it fast.

2) Pay off all consumer debt – Start with the smallest bill that has the biggest interest percent. Pay that off and then put that money toward the next largest bill with the next largest percent interest. Repeat this again and again until all of your car loans, student loans, medical bills, gas cards, and credit cards are paid in full.

3) Save up a 3-6 month emergency fund – Now that you’re completely out of consumer debt, it’s time to save up a real emergency fund. This will protect you from a job layoff or a huge unexpected bill in the future. It’s not super exciting, but it is essential.

4) Invest 15% of your income – It is crucial to start saving for your future as soon as possible so that your money has time to build and grow. Put at least 15% of your income into investments for your future retirement.

5) Save for your kid’s college – College is getting increasingly expensive, and if you don’t want your kids to go deeply into debt, then it might be wise for you to save up some money for them. The most common way to do this: a 529 plan.

6) Pay off your house – There are many people that will give you a strange look if you tell them that you’re paying off your house. It just isn’t normal. But, believe me, once you get rid of your house payment it is super easy to build wealth and get rich!

7) Get Rich and Give – This world is unknown to many, but if you continue to have a strong belief, have a reason, and then follow the steps above, then you will get there. It is an absolutely incredible place to be and I would love for you to experience it for yourself!

Well that’s it! The absolute best way to get rid of debt! If you are just starting out with your get out of debt plan, just be sure to keep the belief and always keep your reason for busting out of debt’s stronghold right in front of you. Everything else is just checking the boxes. If you ever want some encouragement, please do not hesitate to contact me! derek [at] I’m always happy to help.

Are you ready to get rid of debt? What is your reason?

Get Out of Debt Money Save Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. You are so right about breaking things up into little steps. I have noticed that whenever I put off doing something, it’s because the task is too big and scary. It takes a little thinking to break it up, but if you do just that, and take it one piece at a time, you can get somewhere. And as you illustrated, that then builds your belief.

    • Definitely! There are some areas in my life where I have done a great job with this, and others where I didn’t take the time. For it to work, you really have to be intentional about setting the smaller goals in order to hit the big one.

  2. Its taken me a while to fully understand the importance of this and similar posts you’ve made in the past have helped me see this. Thanks for the inspiration!Earning extra money is definitely something I’m trying to achieve.If you cut back and have a side hustle then the debt will be gone quicker than expected. I have committed to doing both when the opportunities present themselves.Thanks for sharing!
    I always liked the idea of combining a more responsible way of living (and saving) with trying to earn more. Just as you said, there’s money to be earned with a little (or some more) effort. You can get more into paying your debt or to savings, whatever your situation is right now. But having a ‘side’ income is always better than none.

    • Thanks for the great comment, Amos! Based on what I’ve gone through, I truly believe that you must first have belief in yourself that you can achieve your goals, and then you must have a solid reason for continuing to “punish” yourself in order to get out of debt. Based on what you’re writing, I would guess that you have both and have also found a way to earn more and spend less. Sounds like you should be debt free in no time!

  3. What a terrific article! Thank you, so much info and to the point! You are so right about starting to kill debt then stop, then start, then stop… I feel like this has been my last 20 years. I think turning 40 a year and a half ago and seeing I was no further to financial freedom than at 22 was my mid life crisis. Instead of buying fancy car,I have gone kill all debt crazy!

    • That’s awesome that you finally flipped the switch, Dawn! Sounds like you now have belief and a solid reason, and your debt is getting its butt kicked! Nicely done!

  4. Having a reason for getting out of debt is big. Otherwise, you will most likely give up because you have no reason to put that extra $100 towards debt as opposed to going out for a nice dinner.

    For me, when I wanted out of debt, it was all about having my money work for me so that I can retire early. The more money I put towards my debt, the sooner I can save more and let compound interest work its magic.

    • Sounds like a good reason to me! I’d say that I’m similar, but my main reason at the time was never to be compromised by my debt again. One month I paid out more money than I made, and then a new bill came in. I realized then that I was going backwards! Never again. I was getting out of debt!!!

  5. These are the nice and practical tips for getting rid of debt. It is always important to curb your spending habits and focus more on paying off your debt.

    • Getting out of debt is pretty simple for 99% of us, it’s just a matter of having belief and having a solid reason for doing it!

  6. It does make sense to approach it in small steps. Paying one bill at a time can add up after a year. Before you know it, you will be able to save and invest.

    • Definitely! After you get rid of debt, saving and investing become super simple. Just think what you could do if you had no house payment!

Comments are closed for this article!

Related posts