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Are you struggling with debt? You’re not alone. According to The Federal Reserve Bank of New York, total household debt increased by $16 billion in the second quarter of 2023 to $17.06 trillion. However, getting out of debt is possible regardless of how much you owe — but it requires a concerted effort and sticking to your goals.

These 10 steps will help:

  1. Identify what you owe. List everything that you owe —including credit card debts, personal loans, auto loans, student loans, mortgages and anything else. Document all interest rates, total amounts owed and minimum monthly payments.
  2. Determine your monthly income. Review your financials to understand how much income you’re working with each month.
  3. Create a budget based on steps 1 and 2. Subtract your expenses from your income to understand how much money is available to reduce your monthly debt. Be sure to tally your totals — add up your income and spending categories. Check out ABA Foundation’s simple worksheet to help.
  4. Evaluate where you can cut expenses. Personal or entertainment expenses are often the easiest things to cut. Consider coupons, consignment shopping, reducing how much you dine out or order takeout, cutting down on streaming services, reconsidering paid subscriptions to publications, and going on a spending freeze for non-essentials. Also consider contacting your utility, cable and phone providers. Lowering those bills could be as simple as a phone call.
  5. Communicate with your lenders. Find out if your lender will offer you a lower interest rate. Sometimes lenders will be willing to reduce your interest rate if you haven’t missed monthly minimums and have a history of on-time payments. Consider speaking with a supervisor if your first conversation doesn’t yield the results you want.
  6. Consider ways to increase your income. Get a second job with part-time hours, work overtime or request a raise. Additionally, consider renting out a room in your home or getting a roommate.
  7. Choose a debt reduction strategy.
    • Debt avalanche or high-interest rate method. This approach requires that you focus on the costliest debts first. Focus on paying down debts with the highest interest rates, such as credit card debt, to pay them off as quickly as possible. Pay more than the minimum for your highest interest rate debt, while paying the minimum required for all other debts. Once you pay off your highest interest rate debt, use the extra money you have available to shift it to paying off your next-highest rate debt and continue the process.
    • Snowball method. Focus on paying your smallest debt and get rid of it as soon as possible, while continuing to make minimum payments on all other debts. Once your smallest debt is paid off, use the extra money available to pay more than the minimum owed for your next-smallest debt and repeat the process.
    • Consolidate your bills. A debt consolidation loan can help you save on interest and combine high-interest loan balances into one lower-interest loan. This way you’re not splitting your payments between several debts.
  8. Get professional help when you need it. Counselors are professionally trained to assess your situation and evaluate the best financial options to consider. And the best part? Most are free! For assistance contact:
  9. Be aware of debt relief scams. They falsely promise to negotiate using their “unique relationships” with creditors to settle or reduce consumer debt obligations. They often charge debt-laden consumers hefty up-front fees but then fail to fulfill their side of the bargain. For more information check out ABA Foundation’s page on Reduce Credit Card Debt Without a Debt Settlement Company.
  10.  Avoid taking on any new debts and stick with your plan.

You can do this; getting out of debt is possible!

For related information, check out the following ABA Foundation tips and resources: