Just in time for the holidays!

If you feel buried under a mountain of debt, you’re not alone. Millions of Americans have debt—from taxes to credit, and everything in between—but you don’t have to let debt ruin your life. Follow these comprehensive steps, and you’ll be well on your way to financial freedom.

1. Understand How You Got Into Debt

People fall into debt for a number of reasons. Reflecting on the ways you fell into debt can help you pay your outstanding balance off—and avoid it in the future. Going into debt is easy, and it’s even easier for your debt to spiral out of control. Sometimes debt isn’t your fault; events like divorce and medical emergencies can leave you with unexpected financial woes.  Reflect on whether any of these common reasons were a factor:

1. • Poor money management
   • Underemployment
   • Reduced income with same expenses
   • Divorce
   • Gambling
   • Medical Expenses
   • Mistakes on a tax return

2. Hire a Professional

It may seem counterintuitive to spend more money to save money, but hiring a finance professional can save you big in the future. Whether you have credit card debt or you need back taxes help, a financial expert can help you set goals and strategize a plan to help you move forward. Qualified financial advisors and tax experts can help monitor your expenses and provide invaluable advice. They can also create a plan so you can stay out of debt in the future.

3. Make a List of Your Debts

It may not be easy at first, but listing your debt will help you gain more control over your financial situation. Use a piece of paper, a Google spreadsheet, or budgeting software to list every debt you owe. There are two main ways to list debt, and a finance professional can help you determine which method is best.

• The Snowball Method

Write down your debt starting with the smallest amount, and pay these accounts off first. This method can be satisfying for those who want to knock out small amounts fast.

• The Avalanche Method

Record debt starting with the highest interest rate, and pay those accounts off first. Paying this way prevents creeping interest rates from raising the overall amount owed.

4. Create a Budget

Your budget determines how much you can reasonably pay each month. Once you create a budget, you might be surprised at how much you save. You can put the money you save toward your debt. Below are some simple steps to create a basic budget.

1. • Calculate your net income
   • Subtract necessary expenses from income
   • Use the remaining amount to pay debt
   • Track your expenses using budgeting software

5. End Bad Spending Habits

If you look at your budget closely, you may notice some poor spending habits. It may feel like a rude awakening, but identifying your negative spending habits now will save you more in the future. Save more money and pay debt faster by cutting out these habits:

1. • Impulsive shopping
   • Gambling
   • Searching for deals
   • Spending more than you earn
   • Ignoring bills
   • Using credit cards as “free money”

6. Set Small Goals for Yourself

Every debt you pay off is a small victory. Celebrate each debt you eliminate with a simple reward, like a night at the movies or drinks with your friends. Make sure that your reward is figured into your budget so that you don’t overspend.

7. Consider a Second Job

If you want to get out of debt fast, it’s much easier with a second form of income. Create another revenue stream by becoming a babysitter, joining a driving service like Lyft, taking on a freelance position, or taking another job that will bring in more revenue. It may not be fun in the present, but working hard now can help you reach your goals even quicker.

Don’t let debt ruin your finances. Take control of your debt and reach your financial goals by following this guide.