Free Yourself From Debt With These 6 Steps

Everyone wants to ride the passive income train, mostly to get a feel for what it would be like to work less and earn more.  I mean, who wouldn’t want to earn while you sleep, right?

We all have our reasons. Get out of debt. Finish school. Raise a family in comfort. Travel the world. There are endless possible reasons for earning passive income. The only other remaining thing is to figure out a plan to actually start doing it.

I do earn money from blogging as well as my other business ventures. However, just because I do doesn’t mean I’ve stopped looking. One of my recent finds that I believe has huge potential is EZ Passive Profits. You can find more information about it on my blog at

Getting out of debt

One of the most common reasons why people work to earn money is to get out hock. Lucky is the man who can claim that he has never been in debt.

Almost everybody experiences being down on luck at least once in life. Some people even start to despair about ever getting out of debt.

I wish I could say that all you need is the proper mindset to escape debt for good, but that wouldn’t exactly be true.

There is hope though. People have done it time and again, and I know you can as well.


Here are 6 Steps To Start Paying Off Your Debts


1. Build up an emergency savings fund

Build up an emergency savings fund

What’s one of the fastest ways to drain your hard-earned savings? Emergencies.

They’re called emergencies because they’re unforeseen. Unexpected. But the fact of them occurring is inevitable.

And when emergencies eat up all of our savings, we see loaning money as the easiest solution. What we don’t see is that we’re digging a deeper pit for ourselves that way.

Here’s what you need to do: 

  • Start saving from everything that you earn every month or whenever you get paid. 20% is a good amount to begin with.
  • Keep your savings funds separate from the rest of your spending money. Only touch it in case of emergencies.
  • In case emergencies don’t happen. Well and good. Still don’t touch it. Let it build up.
  • In case you do need to use it in an emergency, commit to save up the same amount you spent and return it to your savings as soon as possible. For example, if you spent $500 for that pipe trouble you had at home last month, you have to pay it back to your own emergency fund in full within the next 3 to 6 months.

It may look like a long shot at first, but it’s a healthy habit that will pay off well in the long run.

2. Try not to add any more debts

Try not to add any more debts

It is doable. And it is worth doing.

First of all, you have to assess why you are in debt. It will be impossible to get rid of your debts if you’re not sure what the reasons behind them are.

Barring real emergencies, debt really is just the easy way to get out of something, but it doesn’t pay off well in the end.

(Note: That sale on the new gadget you’ve been wishing to have for several months now is NOT an emergency.)

To stop incurring any more debts, live within your means. There really is no other way around it. Make do with what you earn. Learn by heart the difference between wants and needs.

3. List your debts and interest rates

List your debts and interest rates

List all your debts.

There are few sentences that inspire as much fear in a person in hock than this.

Admittedly, it can be quite daunting. But to start figuring out how you’re going begin paying them off, you have to have a clear idea of ALL your dents first.

List all your debts and loans starting from the ones with the highest to lowest interest rates.

Which ones do you think you should start paying off first?

Start with the ones with the highest interests. The faster yo get rid of them, the easier it will be for you to start saving money, too.

And then, proceed according to your list. Pay them all off, one at a time.

You’ll find that the more debts you cross out from your list, the higher your confidence grows as well. Not only will your finances start to look better, you’ll start feeling better about yourself too. And that’s always a good thing. It will motivate you to keep going and going.

4. Start a budget plan and stick to it

Start a budget plan and stick to it

Budget planning is a skill that needs constant practice to perfect. But a budget is not only a necessity. It will also be your best friend and ally against debt.

Remember when I said, “Live within your means”? Having a budget will help make that easier.

If you know exactly how much money you have for spending, it will be easier to avoid unnecessary expenses. At the same time, it’s a good way to protect your savings and emergency fund as well.

For starters, get your bank statement or your latest payslip. Then, on a notepad, list all of your regular expenses. Bills, food, mortgage, tuition if you still go to school. Everything that you can’t afford not to pay on a regular basis.

It may help to have a budget and personal finance to keep you on track. You can download apps like Spendee or EveryDollar. They’re free for both Android and iOS.

More importantly, you need to stick to your budget. As much as possible, try to make it without spending a single cent more than you’ve allotted for a particular item on your budget list.

It will take some getting used to at first, but it will be worth it in the long run. Budgeting is also a healthy habit that you’ll be able to carry on to your old age and hopefully pass on to others as well.

5. Challenge your expenses

Challenge your expenses

The time you create your budget list is also the best time to introspect about your incidental expenses.

Ask yourself these questions? 

  • How much do I need this item? Can I live without it?
  • Is it worth having? How lomg can I expect it to last?
  • Is there any way to get it at a cheaper price?

The truth is, in the process of getting out of debt, you’ll have to put in some extra effort into cutting non-essentials out of your budget.

At the same time, be on the lookout for more ways you can cut back on expenses.

For instance, you can try cooking your own meals. Forget #fastfoodislife. You’ll find that doing your own grocery shopping not only makes it easier to stick to your budget, it can be quite fun, too.

6. Monetize as much as you can

Monetize as much as you can

Aside from earning passive income, you also need to look for other ways to make extra money as much as possible.

There are literally thousands of ways to make money on the side.

Here are a few examples: 

Get a part-time job. The easiest way to do this if you spend most of your time on your computer anyway is to find some kind of freelance job. Capitalize on the things that you do best. There’s bound to be someone out there who will pay for the kind of help you can give. Check out websites like Upwork and Fiverr for gigs that you can try out.

Sell your stuff. Put up a garage sale and sell things that you don’t need anyway. You’ll be surprised how much people would be willing to pay for some of the things you take for granted.

Sell crafts. If you’re the DIY-type who likes to tinker and create handiwork as a hobby, that’s a goldmine right there. Why do you think do websites like Etsy are so popular nowadays. You can also use social media effectively to market your creations. The amount you can get from the beauty you create can both astound and delight you.

Earn from Youtube. If you’re the kind of person who’s inseparable from his camera, it’s time to get paid making money from your videos.

Get paid doing microtasks. Microtasks are very simple tasks you can finish within minutes. Most of them only pay from a few cents to a dollar per tasks but they can build up quite nicely, too, if you keep at it enough.

Some sites that pay for legit microtasks are: 

  • Amazon Mechanical Turk
  • Microworkers
  • Crowdflower
  • RapidWorkers
  • Short Task


It’s up to you now!

Following the above-mentioned steps can definitely help you get out and stay out of debt.

It’s still up to you though. Getting out of debt requires consistency and perseverance from beginning to end. If you think you can do well with delayed gratification, then there’s no reason you won’t be able to get out debt soon.

Then there’s the after.

Once you’re 100% debt free, try your very best to remain in control of your finances. Remember that having no debt makes it easier to achieve your goals. You can even retire early once you’ve saved a comfortable enough nest egg. But only if you don’t have any unpaid dues to wear you down anymore.

Make no mistake. Paying off your debts is rarely ever a painless process. It will be hard and, most of the time, it will be long and drawn out as well.

But one day soon, once you emerge debt-free and victorious, you’ll look back and see that it was all worth it.

Kevin Ocasio

Kevin Ocasio is a digital entrepreneur and retired Marine who runs his own blog, Passionate about online marketing and SEO topics, his goal is to help aspiring entrepreneurs succeed online. He is a proud father of four and husband to Nicole.

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