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You Can Get Out Of Debt (I Did!)

Yes, You Can Get Out of Debt
How did I get here?

That’s what I thought when — at just 26 — I was sitting in over $80,000 of debt. Maybe you’re wondering the same thing. However you got into debt, you can get out of debt. All it takes is the determination to do what it takes…and time. Somehow, I was able to pay off that $80,000 in just about three years!

Debt may be a four-letter word, but it doesn’t have to be a bad one. Debt helps companies finance growth and create jobs. Debt enables students from underprivileged neighborhoods to become doctors. Debt helps young families buy homes. Unfortunately, there’s a thin line between how much debt can lift up your financial situation and debt that can crush it.

Too much personal debt becomes a cancer within our finances; the interest payments grow and grow until there’s not enough money left over to pay the rent, buy the groceries, or anything else. When that happens, we may simply borrow more to forestall the inevitable total collapse of our finances. It may buy time, but it makes the situation that much worse.

Just how bad is your debt?

If you’ve realized that you need to get a handle on your debt, congrats on taking the first step, and thanks for checking out Money Under 30. Depending on the kind and amount of debt you face and other aspects of your situation (like your income, your other expenses, and your credit rating), the best route to get out of debt will be different for every person.

In debt, but making it work

If you’re able to consistently make your monthly debt payments and you have enough left over to eat, pay for gas and enjoy an occasional indulgence, that’s a good thing. Things are manageable for now (even if you might be one big bill or job loss away from disaster!)

Lots of debt (student loans, auto loans, credit cards, etc.)

If you’re dealing with a mix of student loans and consumer debt and simply want to get out of debt as soon as possible on your given income (even though it may take years), learn the many ways to get out of debt on your own. Do whatever it takes!

A credit card balance that won’t go away

If your debt woes are limited to credit card balances that’ve gotten a out of hand, you have a couple of options to explore first. If you have:

  1. The income to pay it off in a year or two and
  2. Very good credit

Transferring the balance to a 0 percent APR balance transfer credit card and paying it off diligently may be an easy option. Read more about the pros and cons of balance transfers here.

Another option is using a personal loan for debt consolidation. These loans let you refinance credit cards or other debts into one loan with a fixed term and monthly payment.

Just student loans

Student loans are a growing epidemic and can take a decade or more to pay off. That’s the bad. But if you don’t have consumer debt on top of your student loans, that’s good news! The key to successfully repaying student loans is to keep your monthly payments to a reasonable percentage of your monthly income. If you’re not earning enough, or try to repay your loans too aggressively, you could begin to fall behind and end up borrowing from other sources to keep your head above water.

Consider whether refinancing or consolidating your student loans is an option, and also don’t be afraid to use programs like forbearance or deferment if money gets tight.

Maxed out

If you can’t make even the minimum monthly payments on one or more debts, things are more serious. If you can’t immediately begin to earn more money or refinance your debt at lower monthly payments, it’s time to begin thinking about more drastic actions.

Credit counseling

Your first step should be to contact the National Foundation for Credit Counseling. They’re a true non-profit agency that can put you in touch with somebody who can provide unbiased financial advice (they’re never trying to sell you anything).

Debt management

Debt management companies can be helpful to some people who are close to being maxed out but not quite in dire straights yet. Basically, debt management companies consolidate your bills into one monthly payments and can sometimes get your interest rates reduced and fees eliminated. These companies do charge a monthly fee, so you need to weigh the pros and cons. Read more about whether debt management is right for you. AVOID companies that promise debt settlement.


Bankruptcy is the last resort for people in over their heads with debt. Despite the negative connotation of bankruptcy, you should at least look into it if things are getting desperate. Bankruptcy can, depending on your income, either put you on a five-year repayment plan that you can afford or forgive your debts altogether. There are downsides: For example, student loans, tax debts and mortgages are not dischargeable in bankruptcy and the  court may require you to sell off assets. Learn more about bankruptcy here.

Take action today

Whatever route you choose, know that as you work to get out of debt, you’re not alone.

Today, over 65 percent of four-year college students graduate with student loans. Their average debt is over $24,000 and climbing. And then there are credit cards, which sooner or later dupe many of us (including me) into racking up debts at ungodly interest rates.

But you can beat debt. I know because I did. I paid off my $80,000 in just over three years. Inexperience and stupidity got me into debt, but determination and hard work got me out. I started this blog because:

  • I want to help you stay out of debt and/or pay off your debt.
  • I want to share my experiences learning about money (and redefining my relationship with money) with you.

More reading

Perhaps the best advice I can give you repaying debt is this: Consider — at least consider — finding ways to EARN MORE money. I hustled for raises at work, transfered companies, got a second job AND started a business…all in the name of beating debt faster. And it worked. Just saying.

General advice

Student loans

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