How to get out of debt: a step-by-step plan you can start this week

The short answer: how to get out of debt starts with seeing every balance in one place, then repeating a payoff plan each month until the balances hit zero.

• Build a small cushion before you speed up payments
• Find money with a tighter budget, lower bills or more income
• Pick a method: debt snowball or debt avalanche
• Pay something on every account each month and stop adding new debt
• Next step: Plan it with the Debt Payoff Planner ($6.99).

Learning how to get out of debt starts with one plain step: seeing every balance in one place. From there, it's a plan you repeat each month until the balances hit zero. This guide walks through the steps, the two main payoff methods, ways to lower interest and how to protect your progress.

Our Debt Payoff Planner turns these steps into one sheet: list up to 10 debts, pick snowball or avalanche, add any extra payment and see your debt-free date.

You're not alone if this feels heavy. The Federal Reserve's Survey of Household Economics and Decisionmaking tracks how many households would struggle with an unexpected expense, and many families carry credit card balances from month to month.

Step 1: List every debt

Write down each debt with five details:

Pull the numbers from your statements or online accounts, not memory. A free credit report from AnnualCreditReport.com can help you spot accounts you forgot about, such as an old store card or a medical bill that went to collections. Add store cards, buy now pay later plans and money owed to family. Our debt tracker guide has a simple layout for this list.

To see how long a card balance will take at your current payment, check the payoff tables in how long to pay off credit card debt.

Step 2: Build a small cushion

Before you throw every extra dollar at debt, set aside a small cushion, often $500 to $1,000. It keeps a flat tire or a copay from going straight back on a card. Keep it in a separate savings account so it's not easy to spend.

This cushion is step 2 in the financial order of operations, which lays out what to do with each extra dollar.

Step 3: Find money to put toward debt

Most extra money comes from three places:

1. A tighter budget. Give every dollar a job and see where it leaks. Our how to stick to a budget guide has practical tips.
2. Lower bills. Call providers, cancel unused subscriptions and shop insurance. See how to lower monthly bills.
3. More income. Extra shifts, a side job, selling things you don't use or putting raises and tax refunds toward debt.

Step 4: Pick a payoff method

Debt snowball: pay minimums on everything and put extra on the smallest balance. When it's gone, roll that payment into the next one. Fast wins help many people keep going.

Our free debt payoff calculator shows your debt-free date and total interest for both methods.

Debt avalanche: put extra on the highest interest rate first. It usually saves the most interest.

Both work if you stick with them. Our debt snowball vs. avalanche guide compares them with examples.

How to pay off debt: which debt to pay first

If you are searching for how to pay off debt, the order matters as much as the amount. Use this priority list before you choose snowball or avalanche:

1. Anything that protects your home, power and car. Rent or mortgage, utilities and the car you need for work come first, because falling behind there causes the biggest problems fastest.
2. Minimums on every account. Paying at least the minimum on time keeps late fees and penalty rates away and protects your credit history.
3. High-interest debt. Credit cards and payday-style loans usually cost the most. The CFPB's credit card resources explain how interest and minimum payments work on your statement.
4. Everything else, in your chosen order. Medical bills, personal loans, car loans and student loans, smallest-first (snowball) or highest-rate-first (avalanche).

How to pay off debt on a low income

A small income doesn't mean you can't make progress. It means the plan has to be smaller and steadier:

• Pay something on every account each month, even when it's only the minimum, and call before a due date you can't meet.
• Ask for hardship programs. Many card issuers and hospitals have them. Write down who you spoke to and get new terms in writing.
• Check for help you may qualify for, such as utility assistance or a hospital's financial assistance policy, so that money can go to debt instead.
• Put windfalls to work. Tax refunds, a bonus or money from selling something can make a payment you couldn't make otherwise.
• Use a free nonprofit credit counselor if the minimums are more than you can pay. The FTC's how to get out of debt guide explains what a reputable counselor does.

How to pay off debt fast

Speed comes from the gap between what you owe each month and what you can pay. To widen the gap: pause extras for 90 days, sell what you don't use, take on a short-term side gig, call to lower rates, and send every raise straight to the debt. Plug your numbers into our debt payoff calculator to see how much an extra $50 or $100 a month moves your debt-free date.

Step 5: Lower your interest where you can

• Call your card companies and ask for a lower rate, especially if you've paid on time.
• Consider a balance transfer to a lower-rate card if you can pay it off before the promotional rate ends. Check the transfer fee.
• Look at a consolidation loan from a bank or credit union with a lower fixed rate.
• Ask about hardship programs if your income dropped.

Lower interest means more of each payment goes to the balance.

Step 6: Know where to get help

If the numbers don't work even with a tight budget, talk to a nonprofit credit counselor. They can review your budget and may suggest a debt management plan. The FTC's guide to getting out of debt explains the options, from counseling to settlement and bankruptcy, and what to watch for with paid debt relief services.

If a debt is with a collector, the CFPB's debt collection page explains your rights, including asking for validation of the debt.

What to do if you are already behind

If you've missed payments, call each lender before the account goes to collections. Ask what they can offer: a payment plan, a short pause, a lower rate or a due date that lines up with payday. Put the most important bills first, such as housing, utilities, car payments you need for work and insurance. Our behind on bills guide shows how to rank them.

If a collector calls about a debt that looks wrong, ask for proof in writing first. Our debt validation letter guide has a free template and a 30-day timeline. For more on this topic, see our debt payoff hub.

If hospital or doctor bills are part of the pile, our guide to medical debt shows how to check bills, ask for financial assistance and negotiate before you pay.

Get every new arrangement in writing and save it with your statements. Keep paying something on time each month, even if it's small, so the account doesn't fall further behind.

Make it a family plan

If you share money with a partner, sit down together and look at the full list. Agree on the method, the monthly amount and one small reward for each paid-off account. A short money date once a month keeps both of you on the same page and stops surprises. Kids can help too, by picking a free family outing to celebrate each milestone.

Step 7: Stop adding new debt

Paying off debt while adding more is like bailing a leaky boat. A few habits help:

• Leave cards at home or remove them from shopping apps.
• Use a cash or debit budget for spending categories that tend to run over.
• Wait 48 hours before any unplanned purchase over a set amount.
• Plan for yearly costs, like car registration and holidays, with sinking funds.

Step 8: Track progress every month

Seeing balances fall is the best motivation there is. Once a month, update each balance and your debt-free date. Celebrate each paid-off account in a small way that doesn't cost much.

Wondering what life looks like once every balance hits zero? Our guide to becoming debt free shows how to find your debt-free date and what to do with the money you free up.

Paying down debt also raises your net worth. Learn how to calculate net worth and check it each quarter to see the progress.

The Debt Payoff Planner ($6.99) handles up to 10 debts with a snowball or avalanche switch, extra-payment roll-over, a month-by-month payoff schedule, your debt-free date and interest saved compared with paying minimums. Pair it with the Zero-Based Budget Spreadsheet ($6.99) to find extra money each month, and the Bill Tracker Spreadsheet ($4.99) so no payment is ever late.

For a deeper dive, read budgeting for beginners, behind on bills and our guide to the debt payoff planner in Excel.

Mostly carrying card balances? Our credit card debt payoff plan walks through seven steps, and our guide to debt consolidation explains when one loan can lower your rate. With good credit, a 0% balance transfer credit card can cut the interest while you pay the balance down.