Getting out of debt is an achievable goal with the right strategy and discipline.
Credit card debt can feel like a bad divorce, and this year it’s about to get very ugly.
After the holidays, credit card debt is expected to reach record levels in 2025. According to the National Retail Federation, spending between November and December of last year was on track to hit nearly a trillion dollars.
To make matters worse, Florida leads the list of states that fail to pay their credit card debts on time.
According to Upgraded Points, a website that provides information on credit cards, travel, and rewards programs, Florida’s delinquency rate is 14.4%.
Other Southern states like Georgia (16.5%), Alabama (16.3%), and Mississippi (17.9%) have higher delinquency rates, defined as being 90 days or more late on a credit card payment.
Sherron Permashwar, known as The Modern Savvy CPA, advises her clients trying to get out of debt to always start by tracking their expenses, even those that seem small.
“If you don’t track it and write it down, you won’t know what you did. You don’t think about what you know, you see what you know,” Permashwar said.
The Modern Savvy CPA said that once people see where their money is going, they can make a conscious decision to cut back on spending. She also advises those using a credit card to try paying it off weekly to avoid accumulating interest.
Here are some practical steps you can take to start today:
1. Assess your financial situation
Take inventory of your debts
- List all your debts: Include credit cards, personal loans, mortgages, etc.
- Write down balances, interest rates, and monthly payments.
Review your income and expenses
- Create a budget: Record your monthly income and all your expenses (fixed and variable).
- Identify areas where you can cut back: This will free up more money to pay off your debts.
2. Set up a payment plan
Choose a payment method
- Snowball method: Pay off the smallest debts first to build momentum.
- Avalanche method: Focus on paying off debts with the highest interest rates first to save on interest.
Set realistic goals
- Determine how much you can allocate to debt payments each month.
- Set deadlines for each debt.
3. Increase your income
Look for ways to earn extra money
- Part-time jobs: Consider freelance or temporary work.
- Sell items you no longer need: This can provide immediate cash.
4. Stay motivated
Be consistent and patient:
- Discipline: Stick to your payment plan.
- Patience: Getting out of debt takes time; don’t get discouraged.
- Celebrate your progress: Acknowledge your achievements and reward yourself for your efforts.
Surround yourself with support
- Talk to friends or family about your goal. They can offer emotional support and helpful advice.
- Avoid new expenses: Try not to take on new debt while paying off existing ones.
5. Consider financial counseling
If you feel the burden is overwhelming, don’t hesitate to seek professional help. A financial advisor can offer personalized strategies and help you create a sustainable plan.
Conclusion
Getting out of debt takes time and effort, but with a clear plan and determination, you can do it. Start today by following these steps and remember that every small step counts. Good luck on your journey to financial freedom!
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