The Surefire Way to Truly Get Yourself Out of Debt

cutting up credit cards to get out of debt

There are a number of ways to get out of debt – perhaps you’re using the debt snowball! Whatever method you use, it’s not going to be effective unless you make one important commitment. The commitment is a surefire way to get out of debt. Can you guess what it is?

No More Debt. Period.

The surefire way to get out of debt is to make a commitment to not go into any more debt. Whoa, simple right? One might assume that this goes without saying. The question is though, do people actually make this commitment?

Not many.

Why don’t people make this commitment? Many who are in debt feel it is just a part of life sometimes and rely upon credit cards, payday loans, or borrowing from family members. If you feel this way, I want to urge you today to consider better options.

While it can be argued that extreme unforeseen circumstances can lead even the most committed among us to go into debt, I’d counter that the higher the level of commitment the less likely you’re to do so. It’s worth making a commitment! Aim higher than you think you can reach, and you’ll reach higher than you would otherwise.

Think about it. If you commit to not go into any more debt – and don’t even try to pay extra toward your existing debt – eventually you’ll be debt free! Debts do pay off over time with a standard payment plan. Of course, I’d recommend doing more than that, but it’s a start.

3 Ways to Keep Your Debt-free Commitment

Some of these methods you might consider, well, extreme. They have worked so far in my life, however, so I thought I’d pass them along to you. The more of these you accomplish, the more likely you’ll be able to keep your commitment to not incur any more debt. Let’s start with the most controversial of the three.

1. Cut up the credit cards.

If you’re making the commitment to not go into any more debt, then why would you need credit cards? Who needs a FICO score when you’re not going to borrow anymore? Even if you plan on getting a mortgage in the future, you should be able to find a mortgage company that will lend to people with no credit score.

I recognize that there are some benefits to having credit cards (such as slightly lower insurance rates) and rewards programs, but if you tend to amass a lot of credit card debt, it might be time to get rid of the cards.

2. Organize your financial house.

Sometimes people go into debt because their finances are simply disorganized. If this sounds like you, make sure you know how to make a budget and actually do it! This is a critical step to make sure you are spending less than you make. And by the way, if you don’t know what budget categories to start with, try my Budget Category Brainstormer – a printable worksheet with over 80 categories and plenty of spaces for you to brainstorm your own!

Another area you might struggle with is paying your bills on time. Oftentimes, there are just too many due dates to keep track of and passwords to online accounts to remember. You might want to give Manilla a try, it’s a free online account and bill organizer. There’s even an app for your iPhone that can send you notifications of upcoming bills!

3. Bulk up your emergency fund.

One of the best things we’ve done for our finances was to build an emergency fund. We earn a bit of interest off of the account (ING Direct) and never have to worry about financial emergencies. It’s saved us a lot of stress and anxiety, that’s for sure! Wherever you save your money, do so in an account you can nickname “Emergency Fund” and only use those funds for true emergencies!

As you build your emergency fund, you’ll find that you’ll feel less of a need for credit cards – or loans in general! You’ll be in control by lending yourself money out of the emergency fund. No more paying high interest to the banks!

Are You Ready to Commit?

If you’re fed up with your debt, it’s time to get serious and make the commitment to never go into debt again. Perhaps you’re not ready to make the commitment to not get a mortgage, and that’s okay. All other debt though – do you really need it?

Can you work through college instead of taking out student loans? Can you save up money for your new car purchase instead of leasing or borrowing? Can you use an emergency fund when times get tough instead of credit cards?

If you’re ready, make your commitment in the comments. Hold to your commitment, and you’ll discover it truly is a surefire way to get out of debt. Not ready? Tell us why in the comments. Questions? We’re open to those too.

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  1. Tony

    Good tips, but the best way to get out of debt and stay-debt free is a complete paradigm shift in the way you view and live your life.

    • John Frainee

      Yeah, it surely does require a radical transformation! Thanks for pointing that out! 🙂

  2. Alice at Dont Debt

    What an awesome way to hold yourself accountable. I made a commitment to my husband (then fiance) that I would not add any new debt to what I already had. I have no intention of breaking that commitment, but honestly, I never thought of making that commitment to God.

    I recently cut up my last credit card. I had to do it and I’ve proven to myself that it was necessary already. I was in a situation where it would have been SO convenient to pull out that pretty plastic to get me out of a bind. Working through the process of getting out of debt is a humbling experience.

    I’m ready to make the commitment not only to my husband, but to my God, that I will not obtain any additional debt. The very concept of this goes along quite nicely with why I started blogging myself. If given the choice to debt or not to debt: Don’t Debt.

    • John Frainee

      Alice, I like how you took it a step further and made the commitment to God. As you know, the Bible doesn’t have anything good to say about going into debt, and I think God would be pleased that you’re following his will. God bless and please comment more!

    • James Meyer

      I agree, I just finished a 6 post series on Biblical finances on my blog and one of them dealt specifically with the Bible’s stance on debt and borrowing. It’s considered as a curse even.

  3. James Meyer

    I have made this commitment. The hardest part is the debts that passively accumulate. For me, as a small business owners, that’s HST remittances and Income tax. I’m currently trying to dig out of about $40,000 in debt, unfortunately, with every paycheque, with every invoice, it grows larger. This year I am actively pre-paying debt with government so make sure that as I clear it up, it won’t continue to grow.

    • Sun

      I used to own a business. Unless you are expecting invoices to actually be paid, a growing debt is a sign that perhaps you are better off by closing the business. Its a very tough emotional decision to make, but as a business owner, you should know when not being in business is the better business choice.

    • James Meyer

      I’ve got things under control now, it was the first 5 years of business that killed me. No training, no mentors, I had to learn on the fly. Now I’m starting to dig myself out. I guess that’s one reason so many businesses fail in the first 5 years.

    • Brian

      Currently going through the the same issue. It’s been a tough first few years, and some days it really doesn’t seem worth it.

  4. Joseph Lalonde

    I’ve already committed to this. Such a simple concept that so few people actually grasp.

  5. Whitney

    Great article because you hit the nail right on the head. My husband and I have attended and taught Financial Peace University for four years and are DEBT FREE. We’re not debt free because of Dave Ramsey. He didn’t go home w/us and hold our hand through all of the rough times. He wasn’t there when we were at the our lowest of lows. We were there together and God was right in the mix of things. We made the commitment that we were completely sick of debt and wanted out of it altogether. Dave Ramsey only gave us the tools that we needed, but it still took us going home and doing the work:)

    • John Frainee

      Thanks Whitney for your kind comment. Dave is the inspiration for a lot of what I write, and I’m glad we’re on the same page! Congrats on being debt-free… aren’t we doing better than we deserve? I think so! 😀

  6. Brent Pittman

    Being debt free is awesome! If you’re reading this, join us. There are so many choices when debt doesn’t determine where your money goes.

  7. Sun

    In the last two years, after accumulating business debt and wedding debt, we’ve chipped away at the $35k debt down to $5k. Now, we are expecting a baby and have some money saved up for the baby in case of any emergency and extended leave options. I’m finding it tough to let go of the 4% company match. It is very rare that I have paid interest or unexpected bank fees in the last two years, but the $5k debt seems to loom. I can either stop or withdraw from some of my investments (outside of IRAs), but its been tough to pull the trigger.

    I’m also not ready to cut up the credit cards. By utilizing all sorts of cash back bonuses, I’ve been able to use the additional income from that to pay off even more debt. For example, I signed up for the Chase Sapphire Preferred and received the $500 cash back to pay off debt quicker. I used the card for my business expenses, so it was not frivolous spending.

  8. Michelle

    What do I do if my husband isn’t on board for being committed to budgeting?

    • Brian

      Pray. Lots of prayer.

  9. Jason Clayton

    I enjoyed this article because it gets at the root of all financial issues – commitment. I’ve found that most people know enough to be Jedi masters of their own financial house. Whats missing is the commitment aspect, or in other words – taking action. We have to take action on principles we learn or already know. Obviously this action can be tremendously difficult because it can mean living a whole new life with a lot less comfort, which is indeed hard.

    The key is that the commitment is worth it, and in almost all cases the sacrifice is temporary. Living debt free can then open up a new world of joy found in giving and providing for those you love.(with a lot less anxiety) Indeed the commitment is worth it.

  10. Tie the Money Knot

    Keeping your financial affairs organized is a very big deal, as those who have their act together and know what is going on are probably less likely to make bad decisions. Also, an emergency fund is key because you just never know when a true emergency might happen. They really can and do happen, even when you least expect it, and in the most unlikely of ways. Best to be prepared.

    I would also add that people should be properly insured. Not having adequate health insurance can really be a big problem.

    As far as the credit card part is concerned, I do think that it’s a good idea to keep credit open. That being said, it’s probably better to focus on self-discipline and proper use of credit, rather than eliminating the cards altogether, at least it would seem that way. Self-discipline can have many benefits beyond those that are financial, and can help is our lives in many ways to help us avoid making mistakes and giving into impulses and temptations we shouldn’t.

  11. Nick Bartlett

    No taking on any more debt is certainly a key element and the other is paying down existing debt. Dave Ramsey is a great Christian speaker on this topic with his financial peace university.

  12. Kathy Mohamed

    I have searched and prayed for wisdom on how to manage my finances. Stumbling on this site today is truly God sent. Thank you so much.