7 tops ways to get out of credit card and personal debt


How is it possible to get out of debt when you are getting in deeper and deeper?

To make a start, you must first realise that the process of spending and debt accumulation is a cycle that must be broken.  Because the cycle is merely the repetition of your daily, weekly and monthly habits, it requires a change in your habits, which is not easy to do on your own.

Your cycle has to be broken somewhere before change can begin to happen. The trigger event could be a knock on your door from a debt collector, the threat of foreclosure on your house, or you asking for help.

Finding the way out of credit card and personal debt, and back into prosperity first requires that you change the way you think about what you actually need and how you pay for it.  You will come to see that changing your mindset here will change your fortunes.

Here’s my top 7 tips for getting out of credit card and personal debt.

  1. Recognise the problem

The way to address the issue is to know what you owe.  How could you not know how much you owe?  Because by the time you get around to asking for help, you may well have stopped opening your mail some time ago.

To do this you need to do a true budget.  This means dedicating a few hours to sit down and do a proper budget of everything you earn and everything you spend. The important thing here is to be honest.  Include your credit card and personal debt and get an accurate picture of where you are now.

By tallying up what you owe and to whom, you are taking the first and hardest step. You are facing up to recognising that there’s an issue to deal with and you are ready to take the next step of enlisting help.

  1. Curb your spending

It is very difficult to go cold turkey and stop spending completely. After all, we are talking about longstanding habits which are hard to change overnight.  So it makes sense to set realistic and achievable goals.  Start by choosing a few things that you can live without yet still not feel deprived.

  1. Spend cash

One of the easiest ways to reduce your spending is to stop using plastic to make purchases.  If you change to a cash-only spending regime, you will realise the very real financial boundaries that cash-only buying imposes, and you will be less likely to make impulse purchases on luxury items.

That little piece of plastic doesn’t really register as money but folding bank notes and jingling coins do.  Using cash only will heighten your sense of awareness of the true value of money.  It also makes you stop and think twice about what you need in your current circumstance to get by as opposed to what you would like in a perfect world.

A credit card creates the illusion of using play-money.  Simply flash the plastic and shopkeepers give you want you want.  How good is that?  It is enticing because for quite a while and there appears to be no accountability; simply pay the minimum payment and keep spending.

  1. Get smarter about credit card use

Here are a few tips about sensible use of a credit card:

  • Limit the number of cards
  • Pay more than the minimum payment
  • Forget reward schemes
  • Avoid cash advances
  • Always read and double check your statement
  • Adjust your card limit to reflect an affordable debt
  • Ask your card provider to stop sending you offers to increase your limit
  1. Live a lifestyle you can afford

It’s called living within your means.  Until you can afford to live the lifestyle you dream of, align your expectations with your income and live the lifestyle you can afford.  Anything else is simply trying to keep up with the Jones’s.

And in my experience, many of the so-called “Jones’s” are also topping up their seemingly attractive lifestyle with credit cards and personal loans.  So don’t be fooled. All that glitters on the other side of the neighbourhood fence is often a lot less than it appears.

  1. Get real about Christmas

We’ve all been through the Christmas spending frenzy which equates to more credit card debt. Who loves Christmas gift shopping?  The honest answer is almost no one.  People who hold the Christian religion dear at Christmas time go to church which apart from the plate donation is free.  Those with young families try to create an amazing time for their children.

Christmas doesn’t have to be about gift shopping.  How to find the time to go gift shopping?  Which gifts to buy for people?  It is a major hassle, creates stress and causes severe financial pressure.  Really, who needs it?

So the essence of Christmas is religious celebration, the joy of children and the great catch up with family and friends over lunch or dinner.  So why not make Christmas all about spirituality, children, food and friendship?  Isn’t that more important than buying Uncle Harry new socks and undies?

For us these days, Christmas is about inviting people we know are alone on Christmas day and inviting them to share a meal with our family.  We put the silly bonbon hats on and play trivia games.  It’s fun and engaging.  And most importantly, it’s very inexpensive.

  1. Seek help

You may get to the stage where it all too hard, you don’t know event where to start and you really don’t think that you can dig yourself out of the huge debt pit that you are in.  This is hard because it means that you have to let someone else in on your long held secret. However, the moment you share your secret, a great weight will lift from your shoulders.  The tiredness, anxiety and the sick feeling in the pit of your stomach will all vanish because finally you are not alone, and there is light at the end of the tunnel.


Red_017 - headshotLogo

Gary Weigh is a licensed financial adviser and Audrey Dawson is a CPA and are co-founders of Change My Fortunes which will be launched in March 2016.  CMF is about empowering people to change their mindset about debt and to get back in the black.



Share Button

About Author


Leave A Reply

Now prove you\'re not a bot *