Drowning in Debt? Try These 15 Simple Recovery Steps

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Are you drowning in debt?

You are not alone. 8 out of 10 Americans are also facing debt issues in one way or another.

Americans are drowning in debt because they start borrowing without any discipline. As a result, debt doesn’t just derail their spending pattern for the present and future but also rob them of their peace of mind.

However, the good news is it is never too late to get out of debt. You can do that and eventually count yourself among the fortunate debt-free minority.

Here, we are going to suggest 15 recovery steps that will help any individual who is currently drowning in debt.

drowning in debt

Benefits of Getting out of Debt

From personal to familial and professional, going debt-free has benefits for all aspects of your life.  For starters, you get more control over the way you want to spend your income. A person who has been juggling many debt payments every month can’t have a say in deciding how to spend their income. 

Getting out of debt could also help you in your career and its growth. You can focus on your job in a better manner when you have less or no debt to worry about.  Similarly, it also improves your family life. When you are not overwhelmed by debt, you get to maintain a healthy relationship with your spouse and children. 

Being debt-free also does wonder for your self-esteem and peace of mind. The absence of the otherwise ever-present worry of debt allows you to focus on yourself and your physical and mental wellbeing. 

In short, when you get out of debt, you get out of survival mode that can seep out all the enjoyment and happiness from your life. 

15 Steps to Climb Out of Massive Debt 

Let’s see the 15 helpful steps that can help you swim out of the whirlpool of debt. It is important to mention here that these steps are not supposed to work in isolation. You have to collectively integrate them into your lifestyle. Also, they don’t guarantee overnight results. You will have to stick to them patiently to reap their benefits.


  • Prioritize Your Spending


When you are in debt, you need to revise and review your spending tendencies. The reason to get into that spending introspection is to make it easy to prioritize your expenses. Keep in mind that at the core of every household spending, there are four basic expenses to be taken care of, i.e., food, utilities, rent/mortgage, and transportation. 

So, assign your income to these four expenses first. Once they are covered, you can spare the remaining income for other important expenditures, for example, a visit to the dentist or replacement of the kitchen sink, etc. 


  • Identify Spending Leaks and Put a Plug 


Spending leaks are all those dollars that you are continuously spending but are unable to account for them at the end of the month. Some examples of spending leaks are ordering something online on your credit card and sweeping the debit card on a spontaneous visit to a restaurant. 

Many such small spending leaks collectively put a huge dent to your budget and also pile up the debt, particularly if you are using a credit card. Therefore, you need to identify all such spending leaks and need to put a plug on them if you are serious about getting out of a never-ending cycle of debt.


  • Trim Down the Extra Overheads


There are necessary overheads, and then there are extra overheads. Since the former type of recurrent expenses can’t be cut, you need to identify all the superfluous overheads and try to get rid of them as much as you can. Do you remember when the last time you used your landline? If you haven’t used it for a long, then why are you paying for it every month?

Similarly, it doesn’t make any sense to have multiple streaming subscriptions when you already have cable and internet connections. No working individual can consume all the content that these streaming platforms are offering. So, just cut back on those subscriptions. Also, revise the cable and satellite plans if you are only using them just to watch the news. 

The ongoing lockdown has also proved that there is no need to pay for a hefty gym membership when you can take care of your basic fitness at home without needing any machines. There can be many similar recurrent expenses that involve redundant services that you may not even notice once they discontinue. 


  • Put a Hold on New Debt


If you are drowning in debt but still sporting a credit score where you can easily get new loans, you have to be extremely careful. For now, it may seem like a better plan to have an extra credit card for “emergency” expenses. However, all those new debts will balloon into larger debt and spiral out of control. 

Just make a simple rule regarding new debt: if it is not a critical emergency involving health, education, or home, you won’t apply for any new debt. 


  • Put a Hold on Investments Too


 Having investments and growing them is a good idea in most financial scenarios. However, saving for the future may not be the best of ideas when you are already drowning in debt. 

When you are living on a paycheck to paycheck and trying to deal with mounting credit card payments or struggling to pay off an auto loan, don’t open a new account of expenditure even if you think it will turn out well in the future.

The option to invest is always open and is not as time-sensitive as debt accumulation. So, pay off your debt first and then invest as much as you want.


  • Go Back to Cold, Hard Cash


Spending $100 via card and spending the same amount from the wallet are two very different experiences. When you make an online transaction or use debit or credit cards, you don’t feel the amount of money leaving your hands as compared to when you have to pull out multiple dollar bills from your wallet and give them away in person. 

So, revert to cold, hard cash for your everyday expenses to be more mindful of the cash outflow happening every month. 


  • Stop Spending on Hobbies 


This sounds harsh given, but it is the need of the hour and essential for your financial wellbeing. If you are spending hundreds of dollars on your hobbies every month when you are already reeling in debt, you need to analyze your behavior and lifestyle. 

Surely, splurging on hobbies and indulging in them makes you feel better and helps you forget the worst of days. However, this will remain a temporary escape in a serious debt situation. In fact, you may not be able to continue with these hobbies after a couple of months if the current debt aggravates any further. 


  • Look for Free Entertainment


Besides hobbies, you need to cut back on your entertainment expenses for a while as well. Try to avoid all those recreational activities that involve tickets. Again, we won’t advise such drastic measures if one doesn’t have an extraordinary debt situation to deal with. 

While cutting back on paid recreation, you need to look for avenues that offer free entertainment. A visit to a nearby landscape any free-entry concert or community events can serve you as free entertainment.  You can also find many such free events online. 


  • Stop Eating Out 


It is yet another difficult decision, especially for all those to whom this has become a part of their lifestyle. The expensive coffee you buy while commuting to work every day is costing you a lot every month. Similarly, ordering food every other day and dining out is costing you all the money that you could spend on paying off your credit card debt.


  • Widen Your Income Stream


While prioritizing your spending and cutting back on your expenses is crucial for getting out debt, it is equally important that you increase your income. Keep in mind that by living paycheck to paycheck, it is almost impossible to recover from debt altogether. Start a side gig or find other unique ways to make money. With the internet is at your disposal, there are many ways to set up your small business.

But if you are not a business type, you can think about having a part-time job. Driving Uber or Lyft in the evenings or delivering foods at weekends, you can take up the job that can easily fit in your existing working schedule. Part-time jobs are not always good for your pride. So, keep reminding yourself that you are doing it to free your self-esteem that is trapped in debt.


  • Streamline Your Credit Card Usage


Even while acting on #6, you may not be able to cut your use of credit cards altogether. Then, you may have to clear the bills of the credit cards that you have already maxed. You need to streamline all of it. For starters, just keep one credit card for critical emergencies and burn the rest of the plastic (not literally).

Also, target the high-interest rate cards first with their payments. Meanwhile, also try to negotiate the interest rate on existing cards with pertaining companies and request transfer of balance to another card having a lower interest rate. 


  • Sell an Asset


Analyze all the assets that you own and see if you can live without any of them without undergoing any major inconvenience and suffering. If you can identify any such asset, sell it. 

For instance, if you already own a car but have ordered another in the last couple for added convenience, you can think about selling its title. Not only will you get some money in your account, but you will also get rid of recurrent payments of the auto loan.


  • Snowball Your Debt Payments


Once you succeed in cutting back on your expenses, increasing your monthly savings, and expanding your income, you need to “snowball” your debt. The snowball debt payment method is designed for individuals who are determined to pay off all sorts of personal loans, and it is simple to execute. 

You just need to sort your debt from smallest to largest (based on principal) and then start paying them in the ascending order, i.e., going from the smallest to largest. Keep this snowballing going until you reach the largest loan.


  • Educate Children 


If you have a family that includes children that are old enough to understand the concept of savings, etc., then you need to educate them further. Many times people are buried neck-deep in debt due to the whims and wishes of their kids. 

Try to explain to them why all of you have to save money. Also, don’t go hard on them and get condescending. This education must remain amicable and free of any disdain. You can also promise them some reward/gift in return for their contribution to help you in climbing out of debt.


  • Learn to Say “No”


Last but not least, learn to say no. The power of saying no goes a long way when it comes to saving and recovering from debt.  Learn to say no to friends when you feel that peer pressure is making you buy things or sign up for things that you can’t afford. 

Also, learn to say no to your partner and kids. They may get angry with you in the beginning. However, they will soon understand and notice the wisdom behind your changed behavior. Most importantly, learn to say to no to yourself. If you can’t control your urges regarding expenses and buying choices, you won’t be able to get out of the debt trap.


Getting out of debt is certainly difficult than getting in it. However, if you spruce up your expenses, strive to save every single dollar, and increase your monthly income, then you can come out successful on the other side of debts.