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6 Steps that finally got me out of debt

Lisa NG

I graduated college with a maxed out credit line and, after a couple of years, I was able to finally be debt-free by my late 20s. Being in debt is a stressful place that I never want to be in again. You have to weigh every little purchase so heavily and it feels like there’s no light at the end of the tunnel. 

Well, I’ve been there and done that and I’m going to share my tips today on how I finally got out of debt.

1. Consolidating

I took all my little credit cards and consolidated all that debt onto a credit line that had a lower interest rate than the credit cards I had. Talk to your bank and see if this option is available to you. I was able to pass a credit check and show my income to be approved. If you need your parents to cosign this with you, have that conversation with them now and see if this is an option.

2. Cutting back on credit card use

I took all the credit cards out of my wallet, except for one. This stayed in there for emergencies only. I hid all the cards away in a drawer and pretended they didn’t exist. I chose to cancel the store cards I didn’t need. When it came to charging new things to the card — I was very particular of what I actually put on it. Could I pay it off every month? Otherwise, I’d just be racking up more debt all over again.

3. Using cash

I started off by setting a weekly budget, taking out the cash at the start of the week and putting it into a plastic Velcro envelope labeled “Weekly Spending Money.” I could see clearly how much I had left for the week every time I opened it up.

4. Cutting expenses

I started packing my lunch, making my own coffee and eating out less. Major trips were put on hold and I went on a shopping diet. I didn’t buy clothes I didn’t need, and if I did, they were not expensive luxury items — I hadn’t earned those yet. I stuck to the basics. I found creative ways to have fun, to be social and have a life while saving money at the same time, as I write on my blog.

5. Making more money

Cutting expenses is a great way to start, but I had to find a way to make more money. I’ve shared on my blog 10 side hustles that you could try to start earning money part time in a legit way. I sold a lot of things on Craigslist and used the extra cash to pay off debt. I also ended up starting a DJ business and started DJing weddings on weekends to help pay off my school debt. That whole adventure turned into a full-time job and I was able to raise my income significantly with the amount of work I was doing.

6. Ask for help

If this all seems emotionally draining and paralyzing for you — don’t be scared to ask for help. Seek out a referral to an excellent financial advisor and get a professional opinion on what you should be doing to get out of debt and how you can start planning for your future. It’s impossible to even think about saving money when you’re in debt — but remember, you won’t be in debt forever! I started saving a little bit at a time, while paying down my debt and I’m glad I did.

If you’re looking for more information or a few helpful posts on your personal finances, visit Chase Bank online for more ideas on your financial fitness.

Have you been in debt? How did you pay it off?

This post is part of a sponsored collaboration between Chase and SheKnows

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