15% of Americans Think They'll Have Debt Forever. Don't Be One of Them.

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Having some debt is OK, but don't let borrowing money become a routine part of your lifestyle.

Almost no one can make it through their lives without taking on debt, whether it's a car loan, a mortgage, or something else. For most people, it's a passing phase that lasts for a few years to a few decades, depending on the size of the loan. But for some, it becomes a dangerous part of their lifestyle, one they just can't seem to shake.

1. Have a plan of attack 

Throwing a little extra money toward each of your debts every month might help you pay it off eventually, but this approach will probably take a long time, especially with debts that have high interest rates, like credit card debt. If you want to pay off what you owe quickly, you need a smart strategy.

Start by making a list of all of your debts, including your balances, interest rates, and minimum payment amounts. Rank them by interest rate with the loan with the highest interest rate at the top. If two loans have the same interest rate, place the one with the lower balance first. This is the order in which you should aim to pay back your debts if you want to pay the least interest overall. You must make the minimum payments on all your debts each month if you want to avoid late fees, but then any additional cash you have should go toward the debt at the top of your list.

2. Create a budget

Now that you have a plan, you need to figure out where you're going to get the money to execute it. Make a list of all your monthly expenses and subtract this from your monthly income. Then, make a plan for the rest. If you have a lot of debt, especially high-interest debt, the bulk of your extra cash should go toward repaying this.

Look for any recurring monthly expenses that you could cut back on, like excess cell phone data, a gym membership you don't use, or dining out frequently. You could also try working a little extra or starting a side hustle to get bring in more money. Put all of this toward your debt repayment.

3. Negotiate, transfer, or consolidate credit card debt

Credit card debt is one of the worst types of debt you can have because it has high interest rates and its revolving nature means that many people add to their debt at the same time that they're trying to pay it off. There are a few ways to get out of that cycle.

You could try to negotiate a lower interest rate with your credit card issuer to prevent your balance from growing as quickly. But your card issuer doesn't have to grant your request. If it's unwilling, you could try a balance transfer. This will temporarily stop your balance from growing, which can save you a lot of money if you can pay back what you owe during the 0% introductory period. Stay mindful of any fees associated with the balance transfer and note its regular annual percentage rate (APR) if you don't think you'll be able to pay it off before the interest rate goes up.

Those with credit card debt on multiple cards might consider taking out a personal loan to consolidate that debt. This will give them one regular monthly payment, which might have a lower interest rate, though many personal loans still charge high interest rates, especially to borrowers with poor credit, because the loan is unsecured.

4. Start planning for your long-term goals

Once you're on your way toward paying off the debt you have currently, it's time to take steps to ensure you don't accumulate new debt in the future. If you have a long-term goal that will cost you a lot of money, like buying a new car, financing a wedding, or going back to school, start allocating a portion of your extra cash each month toward saving for these goals. 

Think about your timeline and the cost of your goals and figure out how much you need to save each month in order to meet them. Consider placing the money in a high-yield savings account to help it grow more quickly without inherent risks that come with investing.

Debt is a part of almost everyone's life, but it doesn't have to follow you to your grave. Use the above steps to end your relationship with debt today.

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