How to Get Out of Debt: Your Complete Guide to Financial Freedom and Security
Debt can feel heavy, like an impossible hurdle standing between you and the life you want. But let me offer you a little encouragement: you have what it takes to take control, get clear on your money, and pay off your debt—not because you’re ashamed or guilty, but because you’re excited about what’s waiting for you on the other side.
This guide isn’t about quick fixes or one-size-fits-all advice. It’s about shifting how you think about debt, creating a plan that fits your life, and finding a way forward that actually works for you. Whether you’re ready to tackle your debt head-on, want to get more strategic with your finances, or simply need help staying motivated, this guide will meet you where you are.
Let’s get started.
Step 1: Reframe Your Mindset & Goals: Why Getting Out of Debt Is About Your Future, Not Your Past
What if I told you that getting out of debt isn’t actually the goal you’re after?
While paying off debt might seem like the ultimate objective, it’s really just the method—a strategy to help you reach the “better position” you truly want. That better position is the real goal.
This is a big shift from how most financial experts talk about debt. But after working one-on-one with clients for over 15 years, I’ve seen how powerful this perspective can be.
Reframing Your Goal
All too often, when someone sets a goal to pay off debt, they think about it as running away—away from financial stress, past mistakes, or feelings of guilt. But what if you reframed it?
What if paying off debt wasn’t about running away, but about running toward something bigger and better?
You might think, “Isn’t that the same thing?” I promise you, it’s not.
Here’s why:
Running away from debt is driven by fear and shame.
Running toward your future is fueled by excitement and inspiration.
This shift isn’t just about how you think—it’s about how you feel, and that matters. When you’re excited about what’s next, you’re more likely to commit to the process, solve problems creatively, and stick with your plan.
What Goal Are You Running Towards?
Ask yourself:
Are you paying off debt because you think you have to? Are you saying, “Debt is bad. I’ve got to clean this up”?
Or are you paying off debt because you want to? Are you saying, “I’m building a better future, and debt doesn’t fit into it”?
It’s the difference between obligation and desire. Obligation feels heavy, like a burden. Desire feels exciting, like a challenge you’re ready to tackle.
The Cost of Old Mindsets & Habits
Think about your previous attempts to pay off debt. Were they filled with thoughts like, “We should do this,” or, “We have to”? Did those thoughts weigh you down, leaving you frustrated or overwhelmed?
Chances are, those efforts felt exhausting. You probably made progress for a while, only to have something unexpected—a car repair, a forgotten expense—derail you. Then, the debt crept back up, and you were stuck in the same exhausting cycle.
When decisions are fueled by guilt or shame, they’re rarely sustainable. But when you focus on the future you’re building—one that excites and motivates you—it’s a game changer. Paying off debt doesn’t have to feel like punishment. It can feel like a possibility.
A New Approach & Mindset to Debt
Helping people pay off debt is one of the top reasons clients come to us. But what makes our approach different is that we don’t treat debt as the problem. Instead, we treat it as part of your overall financial strategy—a step toward creating the life you want.
So ask yourself:
- Do you want to pay off debt because your past choices embarrass you?
- Or do you want to pay off debt because your future is worth it?
When you make this mindset shift, everything changes. Paying off debt isn’t just about fixing mistakes—it’s about running toward the life you deserve.
Step 2: Take a Closer Look at Your Debt – Are You Really in Trouble?
Let’s address something I hear all the time: people equating having debt with being “bad” with money. I can’t tell you how much I dislike this narrative.
Too often, the assumption is that if you have debt, you’re in financial trouble. On the flip side, being debt-free is held up as the ultimate marker of success. But debt doesn’t define your intelligence, your worth, or your future.
Here’s the truth: debt is not inherently bad. What matters is how you manage it, the intention behind it, and whether it aligns with your financial goals.
Debunking the “Debt Equals Failure” Myth
When I tell people I’m a financial coach, I often get responses like, “Oh, I’m doing great with my money. I don’t have any debt.”
Statements like this reveal how deeply ingrained the belief is that having debt means you’re not doing well financially. But that simply isn’t true.
I’ve worked with clients who have debt but are strategic, intentional, and financially thriving. These are people who use debt to achieve their goals in a calculated, smart way. They’re what I like to call “financial rockstars.”
I’ve also worked with clients who avoid debt entirely and have built their financial success without it. They, too, are financial rockstars.
The point is: debt itself isn’t the determining factor. What matters is your approach.
The Key to Managing Debt Successfully
Here’s what I wish more people would say:
- Debt can be a tool—but only if you use it intentionally and strategically.
- “Having debt” and “leveraging debt” are not the same thing.
For example, in my own life, my husband (aka Mr. Fiscal Fitness) and I have used debt strategically:
- We have a 0.9% auto loan, which allows us to keep cash in savings earning 4.25% interest.
- We use credit cards as part of our money management system, earning points and paying off the balance every Friday.
- We have a mortgage on our home and a rental property, both of which align with our long-term financial goals.
We’ve chosen to leverage debt in ways that work for us—and I’m proud to say we’re financially thriving because of it.
Why “Debt-Free” Isn’t the Only Path to Success
The idea that being debt-free is the only way to be successful with money can actually be harmful. It creates unnecessary shame and limits the conversation about what’s truly possible.
I’m not saying everyone should run out and rack up debt—that’s not the point. The point is that success with money looks different for everyone. It’s about understanding your goals, being intentional, and finding what works for you.
So, if you have debt, ask yourself:
- Is this debt helping me achieve my goals?
- Am I using it strategically and intentionally?
If the answer is yes, then you’re on the right track. If not, it’s time to reassess and create a plan that aligns with your values and vision for the future.
Step 3: Get Clear on Why You’re Stuck – What’s Holding You Back From Getting Out of Debt
Debt can feel like a heavy weight, not just in your finances but in your daily decisions, your long-term dreams, and even your sense of self-worth. But here’s the truth: being in debt doesn’t mean you’re bad with money, and it’s not a reflection of your discipline.
Over the years, I’ve worked with clients who are disciplined in every area of their lives—people who wake up at 5 a.m. to work out or thrive under intense pressure. And yet, they still struggle to get out of debt. So, if it’s not discipline or financial smarts, what’s the real reason so many people feel stuck?
The Root of the Problem: A Lack of Clarity
If you’re stuck in debt, it’s likely because you don’t have the full picture of your money. Without clarity, it’s nearly impossible to see how your daily financial decisions are connected to your bigger goals—or how they might be keeping you from making progress.
Think about this:
Your paycheck hits your account, and on the same day, several bills are automatically deducted. Over the next week, there are transactions for groceries, gas, maybe a coffee here or a takeout meal there. Then, a few “whammies” hit—unexpected expenses like car repairs or a last-minute birthday gift.
Some months, everything feels manageable. You even pay a little extra toward your debt or move some money into savings. But then, the next month hits hard, and you find yourself relying on credit cards just to get by. Two steps forward, two steps back—it’s frustrating and exhausting.
Why Clarity Matters
Here’s the thing: most people aren’t out there making financial decisions they know are bad. Instead, they’re making decisions without fully understanding the impact.
They’re thinking, “I think this is okay. I’ll figure it out later.” Sometimes, it works out. But sometimes, it doesn’t. And when you can’t clearly see the ripple effects of today’s decisions, it’s easy to feel like you’re spinning your wheels.
What if that wasn’t the case? What if you had total clarity about your finances—what’s coming in, what’s going out, and how each decision connects to your bigger financial picture? Imagine how much easier it would be to plan ahead, make confident choices, and avoid those financial “whammies.”
How to Gain Clarity
Instead of focusing solely on paying off your debt, ask yourself:
- How can I get a clearer picture of my money?
- What tools or systems can I use to track my expenses and plan ahead?
- What steps can I take today to feel more in control tomorrow?
When I work with clients, this is where we start. I look at their numbers and help them connect the dots, so they can see their financial picture with total clarity. Once you can see the bigger picture, everything changes—you’ll have the confidence to make better decisions and the tools to create real progress.
The Best Part? Clarity Changes Everything
Once you truly understand your finances, you’ll start to see solutions where there used to be stress. You’ll feel empowered to make decisions that align with your goals and excited about the progress you’re making.
Your debt isn’t the problem. The problem is the lack of clarity keeping you from moving forward. Solve that first, and you’ll be amazed at what happens next.
Step 4: Build a Strong Foundation – How to Set Yourself Up for Debt Payoff Success
If you’re reading this, chances are you’re ready to tackle your debt. But before you jump into paying it off, let’s make sure you’ve built the foundation to keep that progress going strong.
Too often, people focus so much on paying off debt quickly that they skip over essential steps—steps that ensure you don’t just pay off debt but stay out of debt for good. Taking the time to lay this groundwork might feel like it slows you down, but trust me, it’s the key to long-term success.
Here’s how to do it.
1: Keep Extra Cash on Hand
I know the idea of throwing every extra dollar at your debt can feel tempting. But here’s the problem: if an emergency comes up—like a car repair or a medical bill—and you don’t have cash on hand, you’ll end up right back where you started, relying on credit cards.
This is what I call false progress. It might feel good in the moment to make a big payment, but without a cushion, it’s not sustainable. Instead, focus on keeping a buffer in your checking or savings account. This way, when life happens (because it always does), you’re prepared.
Mantra to remember: Slow but steady progress is better than fast but fleeting progress.
2: Plan for Irregular Expenses
What’s the number one culprit for why so many people can’t seem to get ahead? Irregular expenses—those pesky “whammies” that always seem to strike when you least expect them.
Think of things like:
- Car repairs
- Annual bills (like car registration or insurance premiums)
- Birthdays, holidays, and other events
- Seasonal costs, like back-to-school shopping or holiday travel
If you’re not planning for these, they can throw your entire budget off track. So, before you dive into debt repayment, make sure you’re setting aside money for these irregular expenses. That way, when they come up, you don’t have to reach for your credit card.
3: Strengthen Your Savings Strategy
Here’s something I’ve seen time and time again: when you’re focused on debt, it’s easy to forget how connected your savings, income, and expenses really are. But your savings play a crucial role in staying out of debt once you’ve paid it off.
Building a strong savings strategy helps you weather life’s storms, keep your finances stable, and stay on track with your goals. It’s the safety net that lets you focus on paying off debt without the fear of falling behind when life happens.
4: Find Your Buy-In
There’s no one-size-fits-all approach to paying off debt. Some people are laser-focused on paying it off as quickly as possible, sacrificing everything else in the process. Others want to make steady progress while still living their lives.
The right method is the one that excites and motivates you. Your excitement matters because it fuels your:
- Commitment to the process
- Creativity in solving problems
- Consistency in following through
When you’re bought into your plan, you’ll see better results, faster progress, and, most importantly, you’ll enjoy the journey.
Laying the Groundwork for Success
Once you’ve laid this foundation—extra cash on hand, a plan for irregular expenses, a strong savings strategy, and a method that excites you—you’ll be ready to take on your debt with confidence.
Debt payoff isn’t just about the numbers; it’s about creating a strategy that works for your life. And when you take the time to build a strong foundation, you’re setting yourself up for success—not just in paying off your debt but in staying debt-free for good.
Step 5: Choose Your Debt Payoff Strategy – Find the Method That Works for You
You’re ready to pay off your debt—amazing! But how do you decide where to start? If you’ve looked up advice, you’ve probably come across plenty of conflicting strategies. Should you focus on the highest interest rate? The smallest balance? The debt with the biggest monthly payment?
Here’s the thing: there’s no one-size-fits-all approach to paying off debt. The best strategy is the one that fits your life, your goals, and your personality.
Let’s explore the four most popular debt payoff methods and how to choose the one that’s right for you.
1. The Snowball Method
The Snowball Method focuses on paying off your smallest debt first. Once you’ve cleared that debt, you roll its payment into the next smallest debt, creating momentum as you go.
How it works:
- List your debts from smallest to largest balance, ignoring interest rates.
- Pay the minimum on all debts except the smallest. Throw every extra dollar at that one until it’s paid off.
- Once it’s paid off, move to the next smallest debt. Repeat until all debts are cleared.
Who it’s best for:
This method is perfect if you need quick wins to stay motivated. Seeing those small balances disappear gives you a boost of confidence and reinforces that your plan is working.
2. The Avalanche Method
The Avalanche Method targets the debt with the highest interest rate first, saving you the most money over time.
How it works:
- List your debts by interest rate, from highest to lowest.
- Pay the minimum on all debts except the one with the highest rate. Direct all extra money to that debt until it’s gone.
- Once it’s paid off, move to the next highest rate.
Who it’s best for:
This strategy is ideal if you’re motivated by efficiency and financial gains. If saving the most money in the long run is your priority, the Avalanche Method is the way to go.
3. The Highest Payment Method
This method focuses on eliminating the debt with the largest monthly payment, freeing up cash flow in your budget.
How it works:
- List your debts by payment amount, from highest to lowest, excluding real estate.
- Pay the minimum on all debts except the one with the largest payment. Put all extra money toward that one until it’s gone.
- Once it’s paid off, move to the next highest payment.
Who it’s best for:
If you have a tight budget and need more breathing room, this method is a great choice. By freeing up the largest monthly payment, you’ll create more flexibility to handle unexpected expenses or invest in other goals.
4. The Emotional Baggage Method
This strategy prioritizes the debt that weighs on you emotionally—whether it’s tied to a bad decision, a stressful time in your life, or a personal loan that’s straining a relationship.
How it works:
- Look at your list of debts and identify the one that causes you the most stress or shame.
- Pay the minimum on all other debts, and put all extra money toward the one that feels the heaviest.
- Once it’s paid off, switch to another strategy that fits your situation.
Who it’s best for:
If one of your debts feels emotionally toxic—like a reminder of a past mistake or a bad chapter of your life—this method can help you find relief. By eliminating it, you’re not just clearing your finances but also freeing yourself from its emotional weight.
Common Mistakes to Avoid
No matter which strategy you choose, watch out for these two common pitfalls:
- Trying to Divide and Conquer
Paying a little extra on every debt might sound smart, but it spreads your money too thin. Instead, focus on one debt at a time for faster results. - Switching Strategies Midway
Stick with the method you choose. Changing course because of new advice or doubt can cause frustration and slow your progress.
If you want to figure out which strategy is best for you, take our free debt payoff quiz here.
Start Where You Are
The truth is, if you’re paying off debt, you’re doing it right. There’s no “perfect” way to do it—just the way that works best for you. Choose the strategy that aligns with your goals, and stay consistent.
Remember: this isn’t just about getting rid of debt; it’s about building a future you’re excited about. And every step you take is a step closer to that future.
Get help creating your personalized debt strategy
Helping people pay off or pay down their debts is just one of the top 3 reasons my clients come to me. My approach is very different, which is why it works. I help you identify what you truly want for your life and see how your debt impacts the trajectory of achieving that life. Your debt is one part of your overall financial fitness, and we treat it as such.
To get a debt strategy that fits you, request your own Money Masterplan session here, and let a Fiscal Fitness money coach create a plan built around a life you desire.
