How to Make a Plan to Get Out of Debt

Make a spreadsheet of all debts owed.

Make a spreadsheet of all debts owed.

Paying the minimum payments on credit cards and other forms of debt won't help you gain much traction toward your goal of being debt free. A concrete plan for eliminating your debt gives you a clear picture of what you need to do to say good-bye to high interest rates. Honest discussion as a couple is necessary for an effective debt-reduction plan. You will likely need to cut back in some areas temporarily, but in the long run, your debt-free status will open up many opportunities.

Discuss and write down your financial goals with your partner. Post these goals where you will both see them on a regular basis to serve as a motivator to stay on track with reducing your debt.

Gather your latest credit card and loan statements for all debts that you have, both individually and as a couple. Review the statements to get a better understanding of what you owe.

Enter all of the key information for each debt into a spreadsheet, including the balance, interest rate, minimum payment and due date for each debt.

Rank the debts in the order that you want to pay them off. Paying off the debt with the highest interest rate often saves you money in the long run, but paying off a few smaller debts first can be a motivator for your debt-free goals.

Write out a household budget that includes all of your expenses, not just your debts. Use the minimum payment amounts for the debts as the numbers in your budget. Include extras, such as gifts, car maintenance and membership fees, since including these things in your budget gives a more accurate look at your finances and helps you avoid spending money that you will need for your actual living expenses.

Identify things in your budget that could be cut, such as a gym membership or clubs you belong to. Look for ways to reduce your expenses, such as lowering your cable package or dining out half as often. These cuts will free up more money to apply toward paying down your debt.

Using your budget as a guide, calculate the amount of money you have left over each month after you've paid all bills and made minimum payments on debts. Plan to apply that left over amount toward the first debt you want to pay off. When that debt is completely paid off, you can apply its minimum payment, plus an extra money, toward paying off your next highest-priority debt.

Update your debt spreadsheet each month to help track your progress toward paying off your debts. Use the spreadsheet as a motivator to stick with your debt-free plan.


  • Commit to not charging anything else on your credit cards. Cut them up, freeze them in a glass of water or otherwise make them unavailable if you are tempted to charge.
  • Nonprofit credit counseling services offer consultations to create a workable budget and payoff plan. These services do not affect your credit rating unless you participate in a debt repayment program through the credit counseling service.

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About the Author

Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience comes from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.

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