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How to Get Out of Debt on Your Own The Ultimate Guide

How to Get Out of Debt on Your Own The Ultimate Guide

Getting Out of Debt – Ours Is The Only Guide You Can Trust

Understand that 90% of the advice you read online is garbage! Our teams at eCheck are experts in this field. Even our intern, lawyer and network administrator chipped in a few ideas. Yet, the mandatory online research I did turned up 90% crap. If you need to know how to get out of debt, then read our eCheck articles. I was honestly shocked by the things I read online.

For example, Tip 1 – don’t get into debt (no shit Sherlock), Tip 2 – Spend less than you earn (boy, you can tell these people are on the ball).

For example, as I pick another online article at random, Tip 1 – Confront how much debt you have (are they suggesting that sticking your fingers in your ears works for some people?). Tip 2 – Change behaviors that got you into debt such as spending too much (the moron actually wrote that on his article as if it was shocking news).

Getting out of debt – Some Tips Are Highlighted In Red

Every tip you read in this article will work and will work well. The tips are from me and the eCheck team of wealth-building professionals. I have specifically highlighted the techniques that have personally helped me get out of debt, and that have helped me build wealth. I have highlighted them in red.

Getting Out Of Debt – A burning desire

Getting out of debt is like quitting smoking, drinking, drugs, gambling or debt, and that is that you genuinely need a burning desire to stop. You need a passion for getting out of debt that borders on obsessive. Plus, you need to take great pride in what you do and make it part of your personality. Just like breaking an addiction, you are going to have relapses that will land you back on your arse, but if you have a genuine and burning desire to stop, then eventually you will get there.

Consider reading Lance Dodes books, “Breaking addiction” and “The heart of Addiction.” Also, read Napoleon Hill’s book called “Think and Grow Rich” and “The 16 Principles of Success.”

The books on addiction will help you understand your behavior as a person in a black hole of debt. The books by Napoleon Hill will help you create a burning desire to get out of debt.

The Snowball Technique

Let’s say you have four debts. You pay Harry Bank $100 per month, Lloyd Bank $100 per month, Peter bank $100 per month and Sally Bank $100 per month. You owe Harry $500, Lloyd $900, Peter $1200 and Sally $3000, so it looks like this:

Harry Bank Balance $500 Monthly Payment $100
Lloyd Bank Balance $900 Monthly Payment $100
Peter Bank Balance $1200 Monthly Payment $100
Sally Bank Balance $3000 Monthly Payment $100

Start with the debt that you owe the least amount with and pay it extra. In our example, you pay it $100 extra per month. After that is paid off, you use the money you were paying for the first debt to help pay off the second. You keep going until the debts are paid off. Here is how it may look:

At the start
Harry Bank Balance $500 Payment $100 + $100
Lloyd Bank Balance $900 Payment $100
Peter Bank Balance $1200 Payment $100
Sally Bank Balance $3000 Payment $100

After 3 months
Harry Bank Balance $0 Payment $0
Lloyd Bank Balance $600 Payment $100 + $100 + $100
Peter Bank Balance $900 Payment $100
Sally Bank Balance $2700 Payment $100

After 2 months
Harry Bank Balance $0 Payment $0
Lloyd Bank Balance $0 Payment $0
Peter Bank Balance $700 Payment $100 + $100 + $100 + $100
Sally Bank Balance $2500 Payment $100

After 2 months
Harry Bank Balance $0 Payment $0
Lloyd Bank Balance $0 Payment $0
Peter Bank Balance $0 Payment $0
Sally Bank Balance $2300 Payment $100 + $100 + $100 + $100 + $100

After 5 months
Harry Bank Balance $0 Payment $0
Lloyd Bank Balance $0 Payment $0
Peter Bank Balance $0 Payment $0
Sally Bank Balance $0 Payment $0

Start with your smallest debt because it will free up its monthly payment the fastest. Move on to the next smallest debt and so on until all your debts are paid. The key to success is to always snowball the payments;to keep paying the money, which means to continue paying the same amount on your debt no matter how much you have paid off. People in massive debt are likely to pay off the first debt and then enjoy the idea of extra cash at the end of the month. They make the mistake of spending the money rather than putting it on their debt, and that keeps them in debt longer.

In the example, after just 7 months the biggest debt is having $500 paid off it every month. This may seem like a lot since the minimum payment is only $100, but remember that 7 months ago, that same person was still paying $500 on debt, it was just being dispersed amongst them all.

Converting Your Debt Into Smaller Personal Loans

If you have credit card debt, then it is probably a good idea to turn your credit card debt into personal loans so that you have an end-date in sight. Getting numerous personal loans may be easier than trying to apply for one big consolidation loan. Credit card debt can go forever, but personal loans have an end date, and that is what matters when getting out of debt. Plus, you can always pay a little extra onto your personal loans and get them paid of more quickly.

Living and Saving With a Partner

Married couples and long-term partners tend to be better off financially because even if just one person earns the money, the other person has time to dedicate thought and planning to their combined budget. If both of them work, then there is the potential for great things.

It may seem impossible, but try living on just one wage. Whichever of the couple earns the highest wage should pay for all the bills and the family’s survival. The other member of the duo should put the entirety of his or her wage onto the debts. With at least $1000 per month being paid off the debts, you will soon see a massive difference. When you are out of debt, you may keep putting one partner’s wages aside to save up for a house that you buy without a mortgage. After just five to eight years, you will have enough to buy a house or apartment without needing a mortgage.

How to Apply for Private Student Loans Cover Image

Consolidation Loans

A consolidation loan is okay if you can get a loan with a better rate of interest than the loans you already have. Consolidation loans really pay for themselves when they get you out of credit card debt. It may seem like a foul move since you are able to pay down your credit card and lessen the interest more easily than you can with a personal loan. But, a credit card with credit on it is a temptation for spending, whereas the money you pay towards your consolidation loan (your personal loan) is not then available for you to spend in the same way it is with a credit card.

Working an Extra Job on Top of Your Current One

The difference is staggering if you are just willing to give it a go. Working a weekend job at eight hours per day is enough to pull you out of debt in a very short period of time.

Sixteen hours of extra work per week, which is eight hours on Saturday and eight on Sunday, will come to a gross of around $120. That is a net of around $93 per week. Say you work around 45 weeks per year–that is an extra $4185 per year.

Let’s say you have a debt of $6500 and you pay $220 per month. By the end of the year, you will have paid off $2640. If you also work 45 weeks in a weekend job, you can add $4185 to that figure, which is $6825. A debt that would have taken almost two and a half years to pay off is paid off in under a year.

Debt Consolidation Companies

They are going to do damage to your credit rating and credit history, but that is probably a good thing if you keep getting into further debt. If you find a good company, they will negotiate with your current creditors and pay off your debts while saving on the interest. They will then offer you better terms and better interest rates than what you were paying, and they still make a profit because they didn’t pay as much interest as you were going to pay.

If you can find one that will lower your amount of debt and your interest payments, then you have found a good one and you should consider giving them a try (after doing all your research).

If you are struggling to keep up with your debt repayments, then a debt consolidation company may not be able to lower your debt, but they may be able to lower your monthly outgoings. When they do this, they may also help your credit rating because using a consolidation company is not nearly as bad as repeatedly missing your debt payments.

Locking Your Money Away Until You Have the Whole Amount Needed

It is a viciously inefficient way of paying off credit card debt, but I used it at a time when I simply couldn’t get rid of my credit card debt because I kept spending the money whenever I put it on my credit card. Here is how you do it.

Pay the minimum payment on your credit card and keep doing that while you save the money to pay it off in full in another account. If you are anything like I used to be, then you are no better at saving money in one account as you are at keeping it in your credit card. That is why you need to lock your money away.

Put the money in an account or some sort of investment where you cannot get to your money. Keep the money locked up until you have enough cash to pay off your credit card in full. When you have paid it off in full, cancel the card, give a tearful goodbye to all the money you saved up, and move on without ever getting into credit card debt again.

It is actually easier these days thanks to peer-to-peer investing. Some peer-to-peer investing companies allow you to save monthly. Put your money into a monthly investment plan. You put your money into a monthly account and it is placed on the monthly market. Your money is locked away for a full month and after the month is over you get your money back with a little interest. The money is then released, but you can have it re-invest automatically so you cannot get your hands on it.

Keep putting money into the peer-to-peer system until you have built up enough to pay off your credit card. Turn off the automatic investment feature so all your money is made available to you. Draw it out and use it to pay off your credit card.

Remember to invest for just a month and have it continue to re-invest on a monthly basis. If you choose a yearly plan, then when you finally have enough money in your peer-to-peer account, you will have to wait a full year for your most recent investment to free up. Remember that the key is to lock away the money you save so that you cannot get to it until the day you have enough to pay off your credit card in full so that you may cancel your credit card–thereby removing your opportunity to spend on it.

Borrowing From Family and Friends

Some of the eCheck team got out of debt when they were younger because they borrowed the money from family and friends. If you watch enough Judge Judy, you may think their friends and family were pretty dumb, but all debts were repaid and valuable lessons were learned about getting into debt.

Borrowing money from family members

Learn How to Budget and Learn How to Enjoy Budgeting

I honestly believe that the key to sticking to a personal budget (i.e. not a business budget) is to enjoy budgeting and sticking to it. It is just the same as dieting. If you get a kick out of losing weight, feeling better, and toning your muscles, then you can learn to love dieting. The same is true for budgeting.

If you have been living hand-to-mouth for years, then you can teach yourself to love budgeting. You can teach yourself to love the fact you are paying down your debt, that you are keeping to your budget, and that you correctly guessed a budget entry. The feeling of accomplishment you get for planning a budget and seeing it come to life is rather special. It takes dedication to keep up a budget, but I honestly feel that when I enjoy a budget that I stick to it far better and tend to it with more discipline.

Even silly things such as having to sneak a little out of your food and decorating budget in order to pay for an emergency vet visit is fun. It is fun because for a moment you thought your budget was going down the toilet, but you have fixed it to make sure things stay on track. It is especially fun when your emergency and contingency budgets have already been sapped because your car decided to start making a funny noise when you turned left corners!

Having Your Debt Payments Drawn Out the Same Day as You Are Paid

If your debt payments and your debt overpayments are taken out on the same day that you are paid, then you do not miss the money as much. Many people are somehow able to make their budgets stretch when they never see/saw the debt money coming out and they never see/saw their original wage. Their debt payments are taken out and they use what is left to make it through the month.

For some people, this is easier than having to pay the debt money out of their wages manually. Even though the same thing is happening in both cases (i.e. debts are being paid), some people find it easier having the debt money removed without them ever seeing it. If you are one of those people, you will probably know what I am talking about.

Keep a Graph of Your Debt and Learn to Love Scratching Debt Off It

I believe that I like this sort of thing because of my years of playing RPG games and leveling characters up. I used to make graphs that showed my current debt. The graphs had boxes, and each box was worth $100 dollars. As I paid money to off the debt, I would fill in the boxes a little like a thermometer fundraiser outside a church.

For me, it is just like leveling up a character on a Role Playing Game. Instead of killing baddies to level up, I am putting my loose change into my debt accounts, I am selling things and putting the money in, I am skimming off my earnings, client payments and so forth. Here is a quick visual example of the sort of thing I mean.

A graph showing debt and how much has been paid

Dramatically Cutting Your Budget

I am not a fan of this tip because I have trouble doing it. I don’t mind the tip that comes later in this ultimate get out of debt article where you conduct a big savings overhaul, but I really have trouble cutting back in a big way as this tip suggests.

It is a fact that many millionaires in the US have never owned a luxury car, have never lived in an exclusive area, and have never bought a suit for more than $300. I am well aware that people who can cut back their budget dramatically are able to save epic amounts of money and build wealth very quickly. It is just not the sort of thing I can do easily without the help of a business associate or my girlfriend.

The last time I tried to cut back dramatically was because I was sinking much of my earnings into a venture that offered free veterinarian services to people in a small village. I had to cut back because I was investing my income (since my income was the only liquid cash I could get my hands on without losing big money in the future). However, after a month of hardcore cutting back, I “rewarded” myself with an awesome and very expensive tumble drier. My girlfriend was less than impressed when she got home from work.

Do Not Announce Your Plans to Your Friends or Family

In the past and from a young age, I have announced my plans to anybody who will listen, and it usually backfires in my face. Some people say that if you announce your plans to other people that you are more likely to stick to them. That is not the case for me because when I announce them, I often end up falling on my ass with a bigger audience. I find that I do better when I suffer and bounce back in silence.

Learn How to Live Below Your Means

The last tip was in red because it is a tip I follow (i.e. I don’t announce my plans to people anymore). This tip is a brilliant tip, but it is one I do not follow. I do live up to my means, and I invest a big chunk of my earnings into various ventures, areas, sectors and places, but I don’t think I could live below my means in a big way.

Usually, I can cut back a little, but I don’t know if I could strip my life back down to traveling on the bus, or on second-class train’s seats at night when drunk people are roaming around trying to pick fights or talk to scared young women.

I am not a snob, but I figure that if I don’t have to, then why should I? I can strip back a little such as buying cheaper vegetarian food, or walking instead of driving, but I don’t think I could go back to the my old days without a dishwasher and without organic milk. My thoughts are that I have worked hard for my stuff, I have sacrificed my health, and a lot of my time, so I don’t think I could take a step back in any meaningful way. There are some people who can, and if it gets them out of debt, then I will applaud them all the way. After all, you only have to live below your means until your debts are repaid.

If you cant pay cash you cannot afford it

Working Harder to Earn More Money

Hard work is the best way to get out of debt and the best way to build wealth. As a child, I used to watch my uncle work non-stop like a freak of nature. He is now worth at least a million and he just doesn’t stop. Even when he does his garden, he breaks a frickin sweat every time.

I was bitterly poor and in debt until my mid twenties. I used to think things such as, “I if sell something online for a profit of one dollar, and I get a million people to buy it.” I was going about it all wrong.

Work hard and not just physically. Don’t be the best toilet cleaner in your town. Clean 20 more toilets than the next person and clean each one 100% better than the next person. Work your mind at all times to figure out ways to be more efficient, ways to get promoted, ways to earn extra money, ways to take advantage of opportunities and so forth. Work hard to earn, to save, to invest, to learn, and to improve. You do not have to be a genius to be wealthy, simply have to work harder than the next person.

Again, it is not about how many of your muscles ache at night. It is also about how you improve yourself, how you learn from your mistakes, how you learn from your success, and how you keep trying and thinking without ever being complacent. That is how toilet cleaners become directors of their own cleaning firms, it is how road sweepers become regional area managers in waste disposal, it is how bullied young girls become famous fashion designers.

It is how single mothers become famous authors*, how Austrian farm boys become movie star senators**, and how patent office clerks figure out a unifying theory in physics***.

* JK Rowling
** Arnold Schwarzenegger
*** Albert Einstein

Credit Cards With 0% Balance Transfers

This technique is only good for people with credit card debt who also have a good enough credit rating to be able to apply for cards with this offer. The transfer fee is often high, but over 12 months you should be able to save enough on interest to make the effort worth your while.

For example, if you had a credit card that charged around $90 of interest every month, you would save $1080 on interest for that year. There would be a transfer fee, which would probably sting. Plus, many of these cards have high APR rates that kick in after the year is up, so rush to pay off the debt before you have to start paying interest.

Have a Whiteboard in Your House That Holds Your Budget

I still use whiteboards in my own home. The worst part is that it isn’t in one of my home offices. It is in my living room. I used to use it for budgeting before Smartphone apps became a big thing. Now my girlfriend and I use it for reminders.

If you are in debt, then fill your whiteboard with budget information in a way that helps you stick to it. You may refer to it when people ask if you are coming out and you have to say no because your whiteboard says you do not have the money. Or, you may use it to remind you how well you are doing with your budget so that you may feel pride and joy at your debt-repayment efforts.

Get Other People To Contribute

give the lease to a friend

There are people in crippling debt that have kids in their twenties living at home and not contributing. They have rich parents and aunties living with them that do not pay their way in the house. You may feel awful asking them for money, but they are financial burdens that are stopping you from paying off your debts. When your debts are cleared, you can go right back to giving them a free ride.

Forget Your Debt Ratio, Zen Habits, Debt Secrets and Quick Fix Methods

This is in red because I do not recommend you invest any time on them because I certainly do not. Screw your debt ratio–who cares so long as you are paying it off? Screw Zen habits–people in massive debt need financial guidance, not inner peace.

There are no debt secrets, there are things you know and things you don’t, and frankly, you can learn all you need to know for free on Also, there are no quick fix methods unless you are taking up a life of crime. People who offer you a quick-fix method do not have your best interests at heart.

Put Down Your Pride

Everybody in the offices has a story about somebody spending money needlessly because of pride or vanity. There are the parents that buy branded shoes that cost $80 for their toddlers, and there are people who spend thousands on a car that spends most of its time looking shiny in the garage. If you are in debt, it is time to put down your vanity and pride until you have paid off your debt. You do not need the best personal-grooming products, you do not need branded clothes, and you do not need a motorcycle with an authentic 1960s exhaust.

Cut Out the Habits That You Secretly Know Are Consuming You

I used to drink too much until it started to affect my work, so I quit drinking alcohol and have never drank since (with the exception of when alcohol is in food such as bourguignon). I used to smoke like a trooper, but I was in debt and couldn’t afford the expense, so I quit smoking and have never smoked since.

There was a time when I used to eat beef like carnivorous monster, and even in my early twenties, it started to give me digestive problems and other associated issues that were costing me money at my GP clinic because I didn’t have medical insurance. I gave up meat and have never intentionally eaten anything that bleeds ever since*–and I have never had digestive problem since, which has saved me lots of money that my GP was once destined to rinse from me.

* I occasionally make a mistake, such as recently when I thought I was taking a bite out of a vegetable spring roll, but it has some sort of fish in it.

Become Self Employed or Work on Commission So You Can Pull Out All the Stops

Becoming self employed is a massive risk, as it deciding to work on commission, but some of the staff say that they got out of debt because they positioned themselves where they were able to work harder to earn more.

They were able to do it and pull themselves out of debt, but it is very risky and very difficult. If you take my advice, I think you should work on commission on a part-time basis, or become self employed as a part-time venture so that you have your full-time job and wages to fall back on.

Forget a Positive Attitude or the Notion That You Should Suffer

Some online article writers seem to think that the clinical and disciplined task of pulling oneself out of debt is some sort of mystical experience where a positive attitude will pay the MasterCard bill. If you want positive attitude, then by all means you should have one, but it won’t help you pay off your debts any faster.

The idea that you should suffer in order to repay your debts is also a little silly. Are you really suffering if you cancel your Netflix account, or if you stop buying shoes for a few months? Is it so bad having to cook your own meals and freeze the leftovers for another day? How much you suffer has little relation to how much debt you repay. In fact, if you force yourself to suffer by pushing yourself too far, you will probably burnout and rebound with a big spending spree or a bout of depression.

Money in a bundle that should stay in your 401k

Do a Savings Overhaul on Your Life and Do Whatever It Takes to Save Money

Bills that are expected to be paid in installments may offer discounts for lump sum payments. Insurance companies tend to offer such discounts, and it pays to take them up on the offer. Remove all unnecessary subscriptions and expenses, from gym memberships to TV and Internet channel subscriptions. Do a serious overhaul of your expenses and find ways of trimming the fat so that you spend much less. Be prepared to find other ways of enjoying yourself. Instead of watching Netflix, have sex with your partner. Instead of going to the gym, play soccer with your friends or kids.

What most interests me about this tip is that it came from two of our female staff members at, and both of them outlined the same tip almost exactly. They almost verbatim clones of each other‘s tips. Both women are very wealthy, and not only did they both offer the same tip, they are both dripping with jewelry.

Hearing the tip about saving money and kicking unnecessary expenses coming from these women caused a fair amount of cognitive dissonance. How can two wealthy women offer the same tip that clearly they are not following…so I asked them.

One of the women said that her tip only applies to people in debt. She said that people who are out of debt and working hard should be able to treat themselves to whatever they want.

The other female staff member said that part of the fun of wealth building is being able to skim off something from the top to spend on something naughty that she knows is an extravagance. She said that years of living below her means have made her naughty spending extra exciting.

Add Your Change To Your Debt Whenever You Check Your Balance

Like many of the tips in this article, I have discussed this tip in other articles on this website. The trick is to add money to your debt accounts whenever you check your account balance. Set up a direct transfer or direct payment and send over your loose change whenever you check your account.

Transfer between $0.01 and $9.99 each time you check your account. Let’s say that your account is at $753.50. You would transfer $3.50 to your debt account, be it your personal loan or your credit card account. If you check your account once per week, then you will end up transferring an average of $5 per week.

Let’s say you do it 45 weeks out of the 52-week year. That assumes that you miss some weeks, and some weeks your account is already at a round number. Take the average amount of $5 x 45 weeks, and that equals $225 per year. That is an extra $225 per year off your debt, and you will not miss the money because it is just loose change. If you are a freelancer or you are paid infrequently, you may even throw a little loose change from your account into your debt accounts whenever you are paid.

Transfer Your Change Page 1

Transfer Your Change Page 2 - out of debt

Create an Emergency Fund to Stop Yourself Relying on Credit Cards Again

If you have credit card debt, then there is always the temptation to spend the money while you are paying it back. It gets even worse if you have an emergency and need money fast. It is better if you have an emergency fund to dip into rather than dipping back into your credit card money and sinking back into debt. You will find it rather demoralizing when you have to dip into the credit card money you have been repaying. It doesn’t feel as bad if you take money from an emergency fund that you set aside for the unexpected.

Learn How to Love Working

I have left this one until last because I think it is the most unbelievable, and yet one of the most powerful tips on this article. I often read quotes where people say you should do what you love, but I don’t think it works that way in real life. Opportunity is rarely dressed up on the guise of your hopes and dreams. I think a big part of financial success is the love of one’s work, and yet I am not suggesting you only work at what you love.

It is more about learning how to love the work you are doing. Feeling needed and required is a big part of what makes a person feel pride about their work. When people say, “That place would fall apart without me”, they are often speaking with great pride, even if they appear to be whining.

The most successful and richest people I have ever met are nuts about going to work. They are doing lots of hard work, and they are devoted to what they do.

The jobs I loved doing, such as my short stint as a sculptor, earned me very little money. The jobs I have learned to love have been the ones that have generated the most revenue.

You need to learn how to love your work. I often have trouble going to sleep at night because I want to work a little longer. I used to do it because I was broke, but now I do it because I love it.

Whether you are tiling bathrooms or operating on people’s brains, you should learn to love what you are doing. Don’t expect to love it, and don’t assume it will grow on you. Learn to love your work with a fierce passion to the point where money is no longer your motivator.

Napoleon Hill said you should go the extra mile. When you love your job, you go the extra mile because you were loving the work so much that you forgot to stop.

Conclusion 1 – Going Bankrupt or Insolvent is Not an Option is not about cheating people. Going bankrupt or taking any type of insolvency is only for people who are in a lot of trouble that they simply cannot escape within their lifetime. It is a final option when all other options have been exhausted.

Conclusion 2 – Debt Made Many Of Our eCheck Team Wealthy

Learning how to get out of debt taught many of our team how to build wealth. The basic principles are the same; you put money aside, you do not spend it, and you make sure it stays invested. Debt is horrible, but if you can get out of it, then you can build wealth. If you can get out of it quickly without cheating, then your wealth building potential is massive.

Conclusion 3 – Final Thoughts

Notice how there is no single answer. When people say, “How did Mr. or Miss. X, Y and Z get rich?” they assume there is one answer, but just like when getting out of debt, there is no single answer. Getting out of debt and wealth building requires a wide range of actions, plans, and outcomes.

You can take a single tip from this article and get out of debt with it, but you are better off using more than one. When I was in debt, I used all the tips that have a red colored header. There was no single answer, single technique, or single secret.

When I paid off my debt, I didn’t start spending the $700 I had extra on new stuff. I had been paying over $700 per month on debt for years, and when my debts were paid off, I started investing my $700 per month to save up for a house so I could buy it without a mortgage. I then started adding more each month as I used the same techniques I used to get out of debt to start building wealth.

Use as many of the tips on this article as you wish, and when you are out of debt and you start building wealth, tell your friends where you got the information.

About The Author

Ash The Great

After a varied career in different industries from the hospitality industry to the financial consultancy industry, Ash now spends his days working as a professional writer.

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