The No-Nonsense Guide to Getting Out of Debt

Let’s face it.  We live in a world fueled by debt and for many, having debt is an ordinary part of life,  For them, racking up the credit cards at Christmas and slowing paying them off while collecting massive interest is a way of life.  Many never pay them off.

From where I sit, it is understandable when people owe money for extremely large purchases like real estate or a reliable vehicle.  That makes sense, but these days, a great deal of consumer debt is lifestyle debt. Lifestyle debt is credit used to purchase clothing, go on vacations, and buy electronics. It is also debt incurred while keeping up with the Joneses, even when the Joneses are both doctors or lawyers with huge incomes while the rest of us work at far lower paying jobs or are retired.

You may be wondering why all of this talk about debt is on a preparedness website. Shouldn’t we be discussing beans, bullets, and band-aids?  Not always.  It is my belief that getting out of debt should actually be one of the top priorities for anyone interested in self-reliance.  And isn’t self-reliance what prepping is all about?

Becoming debt-free requires a lot of determination and stamina. It is my hope that this no-nonsense guide to getting out of debt will help you reach a whole new level of financial security.  Shall we begin?

How bad is it?

A 2013 report stated that the average American household was in debt to the tune of more than $225,000.  It gets worse – the average family also has less than $500 in savings. And worse still, 1 in 3 households have at least one debt in collections.

Add to this our floundering economy. Businesses are failing left and right, companies are downsizing, and hours are being cut. So not only do many Americans owe a vast amount of money, their income is on shaky ground as well. According to Michael Snyder, the founder of The Economic Collapse Blog and the author of The Beginning Of The End and Get Prepared Now, an alarming 102.6 million Americans of working age do not have jobs right now.

With so much debt and so little savings, a job loss would not be an inconvenience for most families. Instead, it would be absolutely catastrophic.

How being debt-free can help

In a buy now, pay later society, most people don’t understand how precariously close to the edge they are with their finances. Every time you purchase something using credit instead of cash, you are increasing your monthly financial obligations. If something goes wrong, then suddenly your family will be in survival mode. The lower your monthly obligations are, the longer you will be able to survive.

If the primary earner in the household were to suffer a job loss or a a reduction in hours, chances are they would receive unemployment benefits while looking for a new position. But these benefits are only a fraction of what the person was earning before. If they were to suffer a debilitating illness, even those meager benefits would be unavailable.

At this point you are in survival mode.

In these situations, it is vital to be able to cut back spending to cover the absolute necessities, things like: shelter, food, medication, insurance, and utilities. What you have left over after those necessities is all you will have remaining to pay for things like debt. The lower your debt, the lower your financial requirements are when you get into survival mode.

If you are deeply in debt when such a situation occurs, it may be impossible to keep up with your payments. The next thing you know, bill collectors will be phoning and property will be getting foreclosed on or repossessed.  This is not a pretty situation and for all intents and purposes, can be a major life-changer that will take years to dig out of.

That is why next to remaining healthy and fit, there is nothing more important than debt reduction or debt elimination for a person who is concerned with preparing for the unforeseen.

Find out where you are

You might be saying “Okay, I get it.  What do I do now?”  The answer is that you need to figure out where you stand.  What are your expenses?

Compiling this information is not fun.  It actually can be downright painful. But, if you don’t know exactly where you stand financially, you cannot make a plan to bail yourself out (unless you are the US Government but that is another story).

What you need to do is is gather up all of your bills, bank account statements, and checkbook register.  On a piece of paper, track where your money is going.  List the following:



Car payments

Vehicle operating expenses (fuel, repairs)


Credit card and other debt payments

Telephone/Cell phone



Extracurricular activities for the kids or grandkids

Extracurricular activities for the adults

Dining out


School expenses


Recreational spending


Miscellaneous (anything that doesn’t fall into the above categories gets its own category or goes here)

Now, separate all of these into the following categories:

Essential expenses: These are the basics that nearly every family must pay for, like shelter, food, insurance, utilities, taxes.

Secondary expenses: These are the things that are nice to have, but not absolutely necessary, like cable, the internet, cell phones, a second vehicle – and they will not be the same for every family. For example, a friend of mine home schools and the program she uses requires the internet, making that payment an essential one.

Debt expenses: These are monthly payments that can be paid off altogether, removing them from the budget equation: credit cards, car payments, house payments, loans, lines of credit.

This will give you a clear picture of where you are and your family’s bare minimum for “operating expenses” – the essential expenses in the first category.  In a truly desperate scenario, that is the amount of money you must have to survive.

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