How to Lower Your Debt in Five Steps


If you suddenly, or not so suddenly, find yourself in massive debt, one of your most pressing thoughts is going to be how to reduce your debt burden so that it doesn’t eat you up from the inside out.For many of us, having too much outstanding debt feels like an insurmountable challenge that we’ll never overcome. Yes, it can really feel that overwhelming. Fear not dear reader, because it is possible to painlessly lower your debt without feeling like the world is crashing down around your head.

Are you ready to learn these tricks of the trade? Then let’s get to it without any further delay. 

  1. Perform a Debt Evaluation


The average American has roughly $4,000 in outstanding credit card debt. Do you know where you stand? Before you can begin reducing your debt, you must figure out your total number.

Why? Well, your total debt amount will have a major impact on the current options available to you to reduce your debt.

So, if you’re really lost and have struggled paying back your debts, print out your credit report to see what they consider is outstanding. Then, add up all of your balances and keep that number to the side. 

  1. Figure out Your Budget If You Haven’t Done So Already

Second, it’s important to take a look at your overall monthly budget. If your finances are really out of sorts, you probably do not have this figure immediately on hand. So, you’ll need to take some time to write down all of your monthly expenses.

Factor in groceries, utilities, insurance, student loan payments, childcare expenses, rent or mortgage expenses, cable TV, Internet, and any other expenses that you might have.

Now that you know all of your expenses, please add them up and write them down. 

  1. Create a Debt Payment Plan


Third, it’s time to put together a debt payment plan.

At this point, you’ve discovered your total credit card debt, you know your monthly expenses, you know your income, and you can now start to figure out the best way to pay your debt. According to Consolidated Credit, experts teaching how to reduce your sources of debt, “Heavy debt brings with it enormously heavy burdens. Steps to get out of debt are varied.”

If it turns out that you have more debt than income at this point, you’re going to have to start cutting back in certain areas of your life. Maybe it’s time to cancel your cable subscription, or maybe you should see if you can go without Internet for a while.

Do you have an expensive cell phone plan? Either lower your plan or eliminate it altogether. And when you’re done, start using the additional money to pay down your credit cards. 

  1. Negotiate with Your Creditors 

Fourth, you’re obviously serious about paying down your debt because you’ve already started on the third step. At this time, we recommend contacting your creditors to see if you can improve the terms of your loans.

In some instances, you may be able to negotiate a debt settlement. In other cases, you may be able to convince the creditor to lower your interest rates.

No matter what, making this call is crucial because it could help you pay down your debts a lot faster without having to spend nearly as much money to achieve your goals. 

  1. Keep Going!

In the fifth step, you have to keep up your motivation at all times to completely pay off your debt. Continue paying down as much debt as you possibly can and still lead a comfortable life.

If it helps, chart your progress to see how greatly your debt reduction has improved and will continue to improve over time. 


Please use this five-step system to begin lowering your credit card debts right now.

Article Submitted By Community Writer

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