3 Basic Principles You Must Not Ignore If You Want to Get Out of Debt

The first step to getting out of debt is accepting your situation and making that decision to resolve it.; Once you’ve made the decision, here’s three principles you can follow to make your trip out of debt-land successful.

  1. Pay Off Your Debts

It can be overwhelming to look at all the bills piled up and trying to think of a way to make them all disappear.; There’s no magic spell, but there is a logical and effective way of doing this.

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  • Lay your debt on the table, including how much you owe and whom do you owe.; Do not cheat!; Once you know how much debt you have, you can start planning how to go about paying all of them off.
  • Make a list of all your bills and your monthly necessities.; Your goal is to pay off your debt, but it’s also important to keep within your monthly income.; That way, you are slowly paying off debt, without acquiring new ones because you’ve stretched your budget too thin.
  • List all your credit card balances in order of priority and pay them off according to that list. Credit card balances that are above 50% of the credit limit affect your credit rating, so they need to be reduced to below 50%. Once all of your credit card balances have been reduced to less than 50% of your credit limit, start paying off the balance on the credit card with the highest interest rate. Every month, pay off the credit cards with the next highest interests until you reach the end of your list.
  1. Work Out Your Budget

This is going to be hard, especially if you’re used to swiping your plastics. So be firm, and don’t give in to temptation.

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  • Draw up a realistic monthly budget, which will allow you pay your debts, utilities and basic necessities, and even allow for a little monthly savings. Do not spend on anything extra unless you have already covered everything in your budget.
  • Stop spending unnecessarily.; Limit the frequency of dining out and do not go beyond your cell phone plans.; Avoid impulse buying, learn to bargain-hunt and discover the power of discount coupons.
  • Do not borrow money to pay off your loans.; Instead, take on a second job or sell or take on a loan on some assets.; There are other sources of extra income too like garage sales, leasing off a room or property.
  • Examine your expenses.; Often, you can refinance your mortgage, find lower car and house insurance rates, and change to utilities that charge lower, so that you are not drowning in payments and will have more money to pay off your debts and more left for your savings.
  1. Be wise with your plastics

One of the most common causes of being buried in debt is the overuse of credit cards.; Here are things you can do so that you don’t ever end up in debt again.

  • After paying off credit cards with high interest, cut them and throw them away. ;Retain only the credit cards with the most favorable payment terms and interest rates.; If you’re trying to build your credit rating, you can retain at least 4 cards. If not, then one is enough.
  • Try to find credit cards with much lower rates than what you currently have.; Opt for a more stable low rate versus those offering 0% initial period but will charge higher fees with renewal.; Accept only a credit limit that you can easily pay off in 3 months and decline any offer to increase credit card limit.
  • Stop using credit cards and pay out with cash as much as possible.; That way, you stay within budget, and do not accrue any more additional debt. Use credit cards only for emergencies and important purchases and never use credit card for everyday spending.;
  • Stop using store cards.; Store cards have the highest interest rates, plus, store cards limit your desire to shop around and compare prices and you end up buying more expensive products.


Believe it or not, you can do a background check on yourself and find your credit score. Take a look at these background check services for a start. Then you can go with other more advanced services like KnowX, LexisNexis and so on.

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