Top 17 Amazing Steps To Debt Freedom

Debt freedom can be experienced by you, follow these simple steps and you will be debt-free. Many of us live with debt in our lives.

Whether it is paying off a vehicle, a mortgage, University fees, or credit card bills, most likely all of us owe a debt in one way or another.

Debt Freedom

It was Balki Bartokomous who said ‘I am in debt. I am a true American’. However, debt can easily spiral out of control and become crippling.

When you are in a pit of debt and spending, it can be hard to see any way out. Yet, you are not alone. There are many people experiencing the same situation.

Follow these 17 baby steps to debt freedom, and like many other individuals before, you will find yourself free of your debts.


1. Assess your debt in order to experience a life of debt freedom.

To begin with, you need to look at the types of debt you have. There are two types of debt- good debt, and bad debt.

Good debt includes mortgages and student loans, as either your home or your services have more value as time goes on.

Bad debt is debt that has high interest and little to no value- such as car repayments and credit card debt.

2. Talk to your creditors.

Many people who are in debt will be too afraid to speak to their creditors. However, if you want debt consolidation then your creditors can often help.

See if they can offer you a lower interest rate or a settlement fee- a fee at a lesser rate if you pay it all in one go.

3. Assess your steps to financial freedom.

You have two options here. The first is to pay off the debt with the highest interest rate first. Pay all your other debts with a minimum repayment, except for this.

Once this highest interest rate debt has been consolidated, you will have fewer repayments each month and it will be easier to pay off the rest.

The other option is to do the opposite- pay off the smallest loan first.

This is Dave Ramsey’s steps to debt-free living options.

Ramsey says: ‘The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior.

You need some quick wins in order to stay pumped enough to get out of debt completely.

When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.’

4. Choose your payment method.

The first option relates to credit card debt.

Take out another credit card with a lower interest rate, ideally one with the first year at 0% interest, and transfer the balance of the higher card to the lower.

You will pay less interest and pay the debt off more quickly.

5. Take out a loan.

If you can, take out a personal loan from the bank.

The interest rate will be lower than credit card debt, so use this loan to pay off your other debts more quickly and save money.

Never use an online personal or payday loan- the fees are extortionate.

6. Use any savings you have to pay off your debt.

This can be risky in the long term, as your circumstances regarding employment or health may change, however, in the short term, it will bring you to debt-free living.

7. Set yourself some goals.

Henry Shaw says “Debt is like any other trap, easy enough to get into, but hard enough to get out of.” this does not have to be true. Use baby steps to become debt-free and it will become easier.

One of the baby steps is to use goals.

Set goals of paying off a loan in a certain time frame, another debt in another time frame, and divide that amount of time by the number of months so you know how much you should be paying off each month.

8. Assess your everyday spending in order to experience a life free of Debt.

Gather all of your monthly financial information- bills, rent, transport, food shopping, non-necessities.

Be true to yourself- do not leave anything out- make sure that you acknowledge every penny that you spend.

9. Create a spreadsheet in order to experience a life of freedom.

On your computer, use Excel to create a spreadsheet of your spending.

Use one column for your fixed monthly expenses- these are things you have to pay, for example, your utility bills, your rent or mortgage, and the amount you want to pay back on your debt.

Use the other column for your monthly earnings. Now, minus the tax, insurance, anything else that comes out of your earnings.

This will give you an accurate number of how much you earn each month.

10. Create a budget in order to experience a life of debt freedom.

Take the amount of money you earn each month, and minus the amount of money you spend on your monthly expenses, including your debt repayment.

What you will be left with is the amount that you can spend on ‘other’, such as entertainment, food, clothing.

Look back at the financial information you gathered earlier and see how much you usually spend on these things, and compareDebt Freedom to how much you now have to spend.

Keep using the spreadsheet. Write down everything that you spend in here, make it a part of your life.

If you are finding it unrealistic to live on this budget, then adjust the amount that you want to payback of your debt.

11. Make sure that you stick to your budget.

To make sure that you stick to your budget, allocate finances for each category- entertainment, food, etc. Put the money for each expense in their own envelopes.

This is a great way to keep track of how much you have spent and how much you have left to spend. Take Andrew Jackson’s advice: “Live within your means, never be in debt, and by husbanding your money you can always lay it out well.”

12. Make a debt repayment plan and budget.

With your debt repayment plan and budget in mind, make small adjustments to your everyday life. Take these baby steps to a life of debt freedom.

Start walking wherever you can to save money on gas. If you do have to drive, then combine your errands into one trip. If you usually drive yourself or children to extracurricular activities, see if you can carpool.

13. Become a thrifty spender.

It is easy to spend more than we have when buying household items and food.

You need to be conscious of how much you are spending. Become a coupon cutter and a voucher saver- every penny will help.

Take a shopping list with you so that you do not throw in items you do not need.

Take the budgeted amount with you and take a calculator or your phone, adding up the items as you go along to make sure you do not overspend. Go for the basics- buy the home brand version of everything.

14. Even better- do all of your shopping online.

Use the internet to purchase your weekly groceries. This way, you can compare the prices of all of the goods, look at how much you are spending, and take advantage of all the deals.

15. Sell off what you do not need.

There are so many ways that you can sell your unwanted and unnecessary items.

You can use apps such as Depop to sell old clothes, and sites such as eBay and Gumtree to sell off clothes, furniture, DVDs- anything.

Get your items into the best condition possible and use excellent wording to really sell your items. Be brutal- don’t hold on to anything that you do not need or use.

16. Change the way that you spend money every day in order to experience a life of debt freedom.

The best way to be spending money- to use cash. Dave Ramsey says: ‘Debt is dumb. Cash is king’ and he is right.

It is easier to keep track of your spending as you have the money right in front of you, you cannot borrow from what you do not physically have.

Of course, there are some things that you cannot pay for with cash, however, use cash for all of your daily expenses. Definitely do not use checks.

These are very rare these days anyway, simply because they take so long to process.

You can write a check when you have money in the bank, yet it may not be processed until three weeks later when you do not have the money to cover this in the bank, so you hit fees every day until you can cover the cost of the check.

‘Don’t write any check that your tail can’t cash’– Bo Diddley. Whatever you do, do not use credit cards.

They have the highest rate of interest. This is not money that you have, it is money that you are borrowing, so stop borrowing. Cut up your cards to avoid all temptation to use them.

Debt Freedom

17. Reward yourself.

This is going to be a long journey to living a debt free life, so make sure that it is a lifestyle change and you do not slip back into your old habits.

Let yourself have a treat when you have paid off a debt- like going out for a meal or having a drink at the bar with your friends.

Yes, you have to be frugal, but you can treat yourself once in a while (as long as you do not go crazy and undo all of your hard work!).


Follow these baby steps to debt freedom and you will be living a debt-free life. It may take months or years, but eventually, it will happen to you.

Just remember to stay on track- do not make any excuses and do not let yourself slip. If you do slip, just get right back into the habit of living to a budget.

Debt makes slaves of us all, handing over money each month to pay back the money we once borrowed.

Heed the words of William Shakespeare: ‘Neither a borrower nor a lender is, for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry’.

Free yourself of your debts- and enjoy a life of debt freedom today.


Image courtesy of Stuart Miles at

Image courtesy of Stuart Miles at

Image courtesy of Stuart Miles at

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