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Your Step-by-Step Guide to Getting Out of Debt

Get out of Debt

Feeling overwhelmed by debt? You’re not alone. Many people feel weighed down by the thought of what they owe and not knowing where to start. The good news: there is a way forward.


According to Debt.org, “American household debt is on a relentless upward trajectory. It was at a record $18.20 trillion by 2025, up $4.6 trillion since 2019. It includes $12.80 trillion owed on mortgage loans, $1.64 trillion in auto loans, $1.63 trillion on student loans and $1.18 trillion in credit card debt.”


At Your Money Style, we’re here to help you create a realistic plan that works for you. Remember—there’s no one-size-fits-all approach. What matters most is committing to a plan you can stick with.


Step 1: Understand Your Debt


Start by writing everything down. List each debt with:

  • Company name

  • Total balance

  • Monthly payment

  • Interest rate


Then:


  1. Add up your total monthly debt payments and make sure this number is in your budget.

  2. Figure out how much extra money (if any) you can put toward paying it down.


👉 Pro tip: [Download our free debt template] to help you organize all your debt.


Step 2: Know the Types of Debt


Not all debt is created equal:


  • Mortgage – generally considered “good debt” since it builds equity.

  • Student loans – can be an investment in your future, but rates vary.

  • Auto loans – often necessary, but cars depreciate quickly.

  • Credit cards – usually “bad debt” due to high interest rates.

  • Personal loans – depends on the rate and purpose.

  • Medical bills – often unavoidable, but can sometimes be negotiated.


💡 If your mortgage has a low rate, it usually makes more sense to focus on paying down higher-interest debt first.


Step 3: Choose a Payoff Strategy


Two popular methods:


Snowball Method

  • Pay extra toward your smallest balance first.

  • Quick wins = motivation boost.


Avalanche Method

  • Pay extra toward the highest interest rate first.

  • Saves the most money over time.


Neither is “better”—choose the one that matches your personality and motivation style. You can even combine them.


Step 4: Find Extra Money to Put Toward Debt


If your budget only leaves you with a small amount to pay down, consider:

Increasing your income:



Cut expenses:


  • Cancel unused subscriptions

  • Use cash envelopes to manage discretionary spending

  • Transfer credit card balances to a 0% APR card (be mindful of fees and terms)

  • Consolidate debt into a lower-rate loan (watch out for origination fees)



Step 5: Stay Out of “Bad” Debt for Good


  • Pay with cash or debit for most expenses to avoid overspending.

  • Limit credit cards to stable monthly bills to build credit responsibly.

  • Skip store cards—those discounts often cost more in interest.

  • Build an emergency fund in a high-yield savings account to cover life’s surprises.

  • Review spending regularly (monthly or quarterly) to catch bad habits before they grow.


Final Thoughts


Debt can feel overwhelming, but you don’t have to carry it forever. By facing the numbers, choosing a payoff strategy, and making consistent progress, you’ll be on your way to financial freedom.


👉 Ready to get started? [Download our free debt template] and take your first step today.


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