Steps to Becoming Debt Free

Debts can become stressful as they accumulate and can impact your financial future and mental health.

Here is a step-by-step guide on how to get debt-free and take control of your finances.

Face your Debt Issues Head On.

It is important to be upfront with your debt and not let it intimidate you. The longer you leave it, the worst it is going to be.

Reduce Spending Wherever You Can

There are many simple and easy ways to reduce spending money. However, it is important if you want to be debt-free, spending less money in the first place is vital.

It may also be a good idea to write a spending diary. This task could be even done on your phone.

The diary will allow you to know what you spend money on and where it is spent.

But while you’re doing that, you could make a few simple changes such as:

  • Having a packed lunch instead of buying food every day.
  • Use public transport than using a Taxi or Uber to travel if you don’t drive.
  • Going for a walk, run or bike ride instead of signing up for a gym membership.
  • Cooking at home instead of getting a takeaway.

Cutting back on things you don’t need will free up more money to pay off debts.

Plan How to Escape your Debt

It is important to make a plan to know how you are going to get out of debt.

  • Work out how much income you have every month. It includes wages, child maintenance or other payments.
  • Work out your spendings and outgoings this includes mortgages or rent, bills and other spendings such as food and petrol.
  • Figure out what is necessary spending and luxury spending.
  • Work out a worst-case scenario, as you will know the least amount you will have in your account.
  • Figure out how much you can afford to spend paying your debts off a month.

Prioritise Your Expenses

Prioritise what expenditures are the most important such as:

  • Mortgage/Rent
  • Bills
  • Secured Loans
  • Food and Drink

Paying Bills on Time

It is important to pay bills as soon as you can. As if you miss a payment, it may default completely, or you may go over on your credit card or overdraft limit.

This extra expenditure adds up quickly, so it’s important to try and avoid them.

But if you are unable to make the payment, it is important to ring up the lender or bank as soon as possible to notify them.

If you are upfront and honest, they may be more lenient to your situation, and you may be able to negotiate a new payment plan.

Change Your Debts Up

Have a look at your current credit card statement. The statement should tell you the current rate of interest that you are paying.

You should reduce how much interest builds up on your credit cards, and balance credit cards can help with this.

You have two options when making your direct debt cheaper:

First, move the outstanding debt to a credit card that offers an interest-free balance transfer.

Weigh up the cost of balance transfer fees and the likelihood that you will switch again after the offer expires.


Transfer your debt to a card that charges a discounted rate until the balance is paid off. Then, even though you are still paying interest, you are unlikely to incur fees when you move.


If there is a fixed or unsecured loan, you will not likely be able to move to a cheaper option.

It is important to contact your loan provider to see if this would be possible, it will depend on outstanding debt and the number of monthly payments left.

It is also important to find out if there are any penalties for early repayments and what these are.


A mortgage is probably going to be your largest expense.

If you can save money on your mortgage, it may help with other financial debts.

If you are currently on a Standard Variable Range, this could be the most expensive option.

So this means looking into a remortgage could be worthwhile.

The first step needs to look at mortgage comparison tables, as they will give you an idea of what deals are available.

If you find a better deal, go back to your current provider. Ask them whether they can offer you a better rate.

This could be a good option, as you can avoid paying any of the repayment, application or legal fees associated with remortgaging.

It may be a good idea to get in contact with an independent financial advisor.

They will expect these options in more detail and help you work out the cost of moving your mortgage.

However, it is important to remember that it is only a good idea to remortgage to save money.

If you are tied into a fixed deal, it is unlikely that you will save money by moving your mortgage because you may have to incur penalty fees.

The penalty fees may mean you are paying more money than you can, trying to remortgage.

Don’t Borrow Anymore Money.

As much as magazines and the media try to sell consolidation loans, they are NOT a good idea.

Getting a consolidation loan out to consolidate unsecured debts such as credit cards, overdrafts or loans into a secured debt.

These debts can put your property on the line if you miss repayments.

Only Pay For The Necessities and Not The Luxury

As running a household is expensive, it is important to make savings wherever you can.

These can include savings on:

  • Switching your energy supplier
  • Downgrading your TV package
  • Reviewing your landline, mobile and broadband packages.

Insurance is also another area where you can make big savings for a small amount of effort.

So it is important to shop around and make sure you are getting the best deal possible.

Put The Savings You Have Made, Into Your Debts.

After switching to more financial savvy products and plans, this should help you free up some money.

Rather than treating yourself with that money. It may be worthwhile putting it into your debts.

It is a good idea to put as much money as possible towards paying your debts off, as this will help you pay them off sooner.

Stick with the Plan

It is important to implement a financial plan and to stick to it to ensure your debt is cleared as soon as possible.

Getting into the mindset of thinking before spending and putting money towards your debt will make you feel better about it.

It will make your debts feel much more manageable and easier to deal with once you start paying them off.

However, if you are dealing with debt, you cannot manage. Therefore, it is important to get help.

It is important to contact free debt advice energy such as the Citizens Advice Bureau, as they will suggest a different way to get rid of the debt.