10 Simple Steps to Face Debt, Save Money, and Regain Peace of Mind

Facing your debt and finances can be terrifying. Whether you are drowning in debt or your feet are only a little muddied from an influx of bills from the climb of inflation, facing financial truths and coming up with a financial plan can feel overwhelming. Tackling finances requires two things: creating a realistic plan and then forming habits around that plan. Here are 10 practical tips to help you tackle debt so you can save money, and build a stronger financial future. 

1. Take a Deep Breath and Phone a Friend

Take some deep breaths, gather supplies, e.g., paper bills, an electronic device for e-bills, papers, pens, etc., and decide to live outside the shadow of debt. Debt can cause panic but the steps used during an emergency also ring true for debt: remain calm, assess the situation, and call for help (if needed). Debt can be emotionally draining, so calling a fiscally responsible friend or a non-profit debt counselor, such as the National Foundation for Credit Counseling, might be necessary to get you calmly through assessment and planning. 

2. Face Your Debt Head-On

The first step to eliminating debt is to know exactly how much you owe (to the penny); this includes credit cards, loans, medical bills, and any other outstanding balances. Narrow it down to every account. If you have library late fees, include those, too. Create a list of your debts. The list does not have to be lovely or neat. Simply get it all down and determine the total. The total may seem beastly, but you’ve done the first hard thing–you determined the number.

3. Begin Your Plan to Get Out of Debt

Eliminating your debt is the destination, but now you must make the map. Paying off your debt from the smallest to largest (despite interest rates) is often the most rewarding plan. Can you tackle a small debt this month? Because once you tackle the smallest debt, you have the psychological momentum to keep going and some extra cash to throw at your next smallest debt. But before this plan can fully come to fruition, you need a spending plan.

4. Make a Debt Elimination Spending Plan

A spending plan is your way of designating where your money goes and a proactive approach to spending and eliminating your debt. A budget is similar, but let’s be honest--budgets sound restrictive, like a cabbage soup diet. A spending plan empowers you to dream and set goals. If your goal is to get out of debt in two years, your spending plan needs to be optimized to reach that goal. 

When your spending plan says debt elimination is the number one goal, then the plan will focus on operating your household and life at a level that keeps you safe, fed, and caring for yourself or your dependents. However, many extras may not be a part of the plan for a time. That could feel like deprivation, but with a shift in your mindset, you could see that as a challenge you’re ready to take on. When you accept that challenge, realize there are things you can do to move toward a debt free future. 

5. Contact Service Providers to Lower Payments

It serves businesses to maintain customers. The cost to obtain a new customer is much higher than maintaining a current one. Take advantage of this leg up and call your service providers to politely ask if they have any promotions or offers to help lower your monthly bill. 

6. Stop Using Credit Cards 

Credit card debt is often one of the most difficult debts to pay down. If you are ready to eliminate debt, it may be time to eliminate credit cards. Using cash for all your purchases simplifies the process of following your spending plan and ensures that new debt is not incurred. Further, credit card use has been proven to cause consumers to spend more. . 

7. Start a Rainy-Day Saving Fund (even if you have debt)

Life will have financial challenges. Saving for a rainy day is crucial and prevents you from falling deeper into debt. Sometimes, the easiest way to create this rainy day fund is to sell an item (or a few) and set the money aside in a separate savings account for financial hurdles. A rainy day fund should be an amount that makes you feel secure that you can handle a car, house, or medical emergency. Fifteen hundred dollars is a good starting point; this would likely cover a significant car repair. For a homeowner, saving more is in their best interest. Any major house component, such as HVAC, can be costly to repair or replace. 

8. Clean Your Sink (and the rest of your kitchen)

A sink full of dishes is a deterrent for home-cooked meals. Besides, a cluttered kitchen can lead to thoughts or feelings of being out of control. By taking charge of first your sink and then your kitchen, you are better able to take inventory of what food you have, meal plan, and cook from home, which is a huge savings and often healthier for you, too. (Food is the third highest cost for most people after housing and transportation.) 

9. Keep Cleaning and Inventorying All Your Spaces

Once your kitchen is clean, keep going and clean the other areas of your home. Clutter and disorganization are often money wasters. When you don’t know what you have or where it is, this misstep can require running to the store and buying a replacement. The replacement may eventually end up lost in the clutter. Stop the cycle. 

Spend time inventorying bathroom products, cleaning products, or any other consumables. Items that are spread out are hard to inventory. Set up your house like a store. Put like with like. Do you have three shampoo bottles in different areas of the house? Consolidate them so you can quickly retrieve them. Consolidation can eliminate the need to go to the store for last-minute supplies, allow for a quick stock of what you have before a shopping trip, and may help you reduce overpurchasing even during a sale.

10. Rethink Entertainment and Streaming Services

If you are in a position where debt is a constant worry, start eliminating the unnecessary from your everyday life and put that savings toward your debt. Expensive entertainment can be cut through a library and other free sources of entertainment. 

Library apps, like Libby or Cloudlibrary, offer free audio and digital books to library patrons. Tubi TV offers a variety of movies and television programs, and Spotify offers free music with ads. YouTube has entertainment and music for any genre or interest. 

“But my streaming service isn’t expensive,” you say.  Even if you have one service at $7 a month–that is $84 that isn’t going toward debt. You can be fully entertained without spending any money. Paid entertainment can come back–but the goal is to eliminate debt and empower your financial future. Even small subscriptions could be preventing you from that goal.

Taking control of your finances starts with small, intentional actions that eventually become habits. With each tiny step, you can face your debt, create a plan, and move toward a sturdy financial foothold. Each little change adds up. Do one thing each day to help you build the future you want.