Have you ever felt like the weight of debt was going to crush you? Don’t miss this simple debt-free plan that will get your finances back on track! 

Have you ever felt like the weight of the debt you carry was going to completely crush you? 

I certainly have. 

When my husband and I graduated from dental and law school (respectively) we graduated with a whopping $650,000 in student loan debt and zero knowledge about how to pay it off. There were countless sleepless nights where I would toss and turn and worry about how we were going to be able to manage that debt and provide a good life for our kids. 

We spent probably hundreds of hours researching easy ways to pay off debt fast and have spent the last few years perfecting the strategies we use. I’m proud to say that we are now on track to being completely debt-free by 2021. 

How to Get out of Debt This Year – Your Simple Debt-Free Plan

Here is the exact debt-free plan that we use. And don’t worry, once you get started, you’ll be pleasantly surprised at how simple it is to follow.

Tally up your debt.

To get started paying off debt, you should tally up exactly how much debt you have. After all, it would be difficult to work towards being debt-free if you don’t even know how much debt you have to begin with. I know it can be painful. It’s kind of like starting a diet—you have to step on the scale that first day. 

Even though the number might not be pretty, you have to know your baseline, i.e, you have to know where you are in order to make progress. It is a lot easier to bury your head in the sand and ignore your mounting debt. 

After all, if you keep making your minimum payments, you’ll eventually get out of debt, right? Maybe, but maybe not. You certainly won’t get out of debt any time fast by ignoring your debt. 

So rather than burying your head in the sand, you’ll need to tackle your debt head-on by calculating exactly how much debt you have. Perhaps you have credit card debt, student loans, a mortgage, a car loan (or two), a personal loan, maybe you even have all or a combination of the above. List out each debt you owe by the amount you owe and what the interest rate is. 

Once you’ve done that, prioritize your debt in a list, putting the highest-earning interest loans first, and the lowest-earning interest loans last. We’ll come back to this list in a moment.

Tally up your income from every source.

Once you’ve figured out exactly how much debt you have, you need to figure out how much income you have coming in. 

This might be as simple as checking your last pay stub if you are on a fixed salary. For others, it might be a little more complicated especially if you are self-employed or your income varies from month to month. 

List out every source of income you have and when you receive it. If your income varies greatly, use your worst income-earning month to base your income off of—it is better to predict not enough money coming in than too much money coming in.

Tally up your expenses.

After you’ve figured out how much income you have coming in each month, tally up all of your expenses. Use past month’s bank statements as a reference so that you don’t forget any expenses. It’s easy to forget some expenses especially if you are using auto-draft so definitely don’t skip checking out your bank statement. If you’ve been using multiple checking accounts or multiple credit cards from different banks, look at all of your bank statements for the previous couple of months.

Don’t forget to include minimum debt payments in your monthly expenses. I also highly recommend calculating savings into your monthly expenses. I recommend saving at least 10% of your income when you aren’t busy paying off debt. While you’re aggressively paying off debt, shoot for saving 1-5% of your income, and factor that into your monthly expenses. (Find out whether you should build up savings or pay off debt here.)  

Subtract expenses from income and make adjustments.

When you’ve finished adding up all of your expenses, subtract them from your income. Is there any money left over? 

If not, you’ll need to make some adjustments so that you have more income than expenses each month so that you can make extra debt payments. You’ll need to either reduce your expenses, increase your income, or both. Without a surplus of money coming in each month, you’ll only be able to make your minimum debt payments. There are many instances in which minimum debt payments will not be enough to ever get you out of debt. Making extra payments is crucial to getting out of debt.

If you need help reducing your expenses, start by creating a budget based on what you are currently spending. Then, look for areas in your budget where you can make cuts. Perhaps you are spending a lot on cable, when you’d be just as happy with a cheaper option like Netflix, Hulu, or Sling. 

If the thought of a budget makes you cringe, or you’ve tried one in the past and it’s just not for you, then set aside time later to read how you can still get a grip on your finances without adhering to a spreadsheet budget here.

Now, if you need help increasing your income, start by figuring out if you can make more money doing the things you are already doing. Has it been a while since you received a raise at work? It might be time to ask for a raise or a promotion. If you can’t get a raise, perhaps you can start looking for another similar job that pays you more.

In addition, there are plenty of other things you can do to make extra money. Consider selling things around the house that you’re no longer using. You could start a blog, run an Etsy shop, or even take a second job in the evenings. Remember the goal is to get out of debt, so you don’t have to take on something that you’ll have to do forever, just until you pay off debt. If you need more ideas, learn how to make money without a job here

Focus on one debt at a time.

Once you know you have surplus income coming in each month (i.e., more income than expenses) you need to focus on paying off one debt at a time using your surplus income. I recommend focusing on the debt with the highest interest rate first because that will save you the most money in the long run. Once you’ve paid off the highest interest-earning debt first, then move on to paying off the next highest-earning interest loan. Continue the process until you are debt-free! If you have loans with the same interest rate, pay off the one with the biggest balance first.

Obviously, the more money you pay towards debt each month, the faster you will be able to pay it off, and the more money you will save in interest. Continue focusing on ways to increase income and reduce expenses during this time so you can put as much money as possible towards debt.

Pay your extra debt payment first.

Before you pay any of your other bills each month, make your extra debt payment first. This way, you ensure that the extra debt payment gets made. Otherwise, it’s too easy to justify using that extra money in other areas of your spending. Your extra debt payment must be your first priority. Paying your extra debt payment first also helps you to remember your goal of getting out of debt and prioritize that with your spending habits.

When you are just starting out paying off debt, it can feel completely overwhelming, if not impossible. I have totally been there. But the truth is, once you get started following the steps above, you’ll see that paying off debt really is quite simple.

Let’s recap:

  1. Tally up your debt and prioritize it by highest-earning interest debt first.
  2. Tally up your income.
  3. Tally up your expenses
  4. Subtract expenses from income.
  5. Increase income or reduce expenses as needed.
  6. Pay off one debt at a time.
  7. Always pay your extra debt payment first.

You CAN do this!

Make 2020 the year you finally get your debt under control. If you need help organizing your schedule and taking control of your finances (as well as planning meals and crushing other goals) all in one easy place, be sure to grab our Living Well Planner!

Other helpful resources:


Have you ever felt like the weight of debt was going to crush you? Don't miss this simple debt-free plan that will get your finances back on track! #budgeting #debt #debtfree #finances #budgettips #smartmoney #moneytips #savemore #savingmoneytips #savingmoney

Amber Masters
Amber Masters is the creator of Deeply in Debt, a personal finance website that provides simple solutions for people with big debt (i.e. tons of great debt payoff and money saving tips). She has paid off over $240,000 of student loan debt and has been featured on CNBC, ABC, and even HGTV. She’s also a wife, mom, attorney, blogger, small business owner, road biker, runner, and mini-cadberry egg enthusiast.
Amber Masters


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