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How To Get Out of Debt and Create Lasting Wealth (5 Step Guide)

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Note: This step by step guide for getting rid of debt is for people who are SERIOUS about changing their financial situation. This is not about casual debt that’s just annoying – this is about big-ugly-high-interest-can’t sleep-at-night-debt.

However, if you’re debt IS just annoying and you want the “good things in life” this guide can be life changing.

I’m going to list the 5 most important steps you need to take if you really want to get out of debt and stay out of debt.

First off, if you’re over your head in debt please don’t beat yourself up – you are far from being alone. Remember it’s just a temporary situation that you can fix and I hope this information can really help you.


Step 1.) Stop Spending Money On “Wants”

If your high interest debt (i.e. – credit cards) is growing, and you can’t service that debt with the income you have, you need to STOP spending even a penny on stuff you WANT. Only spend money on the things you NEED – like food, shelter, and perhaps clothing items if they’re needed for your job.

Too harsh? A little drastic?

It depends on how serious your debt problems are and how serious you are about drastically improving your financial situation. Please read the first paragraph of this post again – I’m trying to help people who are frightened and stressed out because they feel like they’re drowning in debt.

This means you stop spending money on movies, drinking, travel, gadgets, devices, clothing, makeup, gym memberships, etc., etc.

It’s over! (for now anyway)

Only the absolute needs like food and shelter are required at this point.

Remember…..this is just temporary – once you have completed this step by step guide you will have PLENTY of extra money to spend on the “wants” – not just the “needs”.

wasting-money-on-wantsUsually when I mention this step to people they recoil at even the suggestion. Who wants to stop all the fun stuff in life and live like a monk in a cave?

I’m guessing you don’t want to start wearing a brown robe with a rope belt anytime soon – nor do you want the funny haircut and the whole silence gig.

Just try it for a day or two at first.

You’ll find out that life isn’t a drag just because he can’t spend money on the extras.

You don’t have to get your coffee from Starbucks every morning – you can make you’re own at home.

Of course there is an adjustment but it won’t be nearly as painful as you think. When you start to see your bank accounts turn around you will be SO HAPPY you took action.

And this is just the first step. If you complete all of these steps you will be a lot more than debt free – you’ll be independently wealthy and financially free.

So go ahead now and cut up all your credit cards except the one with the lowest interest rate. Don’t worry – you don’t need them – you never needed them.

This first step can be life changing in itself because you end up finding activities that don’t cost you a penny.

I’ve seen some people improve their health dramatically because they got fanatical about it, quit smoking, and sold their car! They’re riding a bike and no longer giving their money to big tobacco (paying someone to ruin their health).

Of course most of us can’t give up our wheels and we don’t want to physically shock ourselves with nicotine withdrawal – but if you can get rid of the wheels and the butts….AWESOME!!!!

I love the old saying,

 “The best things in life are free.”

Most old sayings are still around for a reason.

They’re true.

Step 2.) Track Your Expenses (Know Your Nut)

Now that you’ve stopped the bleeding and you no longer spend money on extras you need to take a deep breath and congratulate yourself – that first step is a doozy but it’s gonna pay off BIG TIME!

Once you’ve had that deep breath take the next critical step and create a CLEAR visual of your finances in the form of a spreadsheet. It’s now 2017 so almost everyone has access to a good spreadsheet application.

You can get an app for your device or use your desktop or laptop using a free spreadsheet program like Google Drive. Below is my personal spreadsheet for monthly expenses.

If you don’t want to (or can’t) use spreadsheets simply write it down on a piece of paper and use a calculator.

Line #4 Natural Gas – The cost of running a pool without a cover – SEE….I’m still a waster!!!

The trick here is to make sure you don’t leave out any expense. It sounds easy but I’m always amazed at how many “little expenses” I forget about. Either I’m forgetting them or I’m subconsciously blocking them because I don’t want to know the truth.

So what I do is “pad” my expenses just to make sure I’ve got everything. I add an extra $400 per month which can be for extras or surprises.

Of course your monthly expense sheet will be completely different.

The important thing is you know your nut – know exactly what you need to earn just to keep the lights on and all your basic modern conveniences going. Then add a line for the extras and see if you are making enough to cover it all.

If you’re not making enough then you will have to get rid of some expenses and/or earn more (don’t worry – we’ll get into earning more further down).

This is temporary – this is just until you’ve completed all 5 steps at which time you won’t have to worry about money anyway.

Step 2.) If You Can’t Pay Your Debt Negotiate It Down

Some of you can still make the minimum payments to your creditors with the earnings you have – and that’s great. But if you’re in a situation where you can’t even make those minimum payments you will have to negotiate with your creditors to reduce your liability. Some people use third-party services to do this but you can do it yourself.

Image from Wallet Hub

You can contact your creditors (banks, credit unions, credit card companies, etc.) and let them know your situation. Tell them how much money you have coming in each month and what you’re going through.

What you’re doing is DIY debt settlement.

You’re saving money doing it yourself and it’s really not hard to do. If you do this it will hurt your credit rating, but at least you’re coming clean with your creditors and making plans to pay what you can.

Once again, don’t worry….this is temporary and by the end of this process the banks will be calling you and mailing you offers for low interest credit cards (that’s exactly what happened to your not-so-humble narrator).

Step 4.) Find A Past-Time That Pays

I’ve written about this in the past so I won’t belabor this point to any great length here.

If you have a fixed income and you live for your days off so you can have fun and “do the things you really want to do”, you’re like most people in the western industrialized world.

If you’re lucky that past-time activity earns you money.

But that is rarely the case. Usually what people do in their spare time costs them money.

So what I’m asking you to do is quit the hobbies and activities that cost you large chunks of money.

Those costs are dragging you down.

Once you’re finances are all in order you can afford to waste money once and awhile – but right now you need to shed all of those activities.

Think about it – sleep on it.

If you spend $200 each weekend you’re down $800 a month. If you MAKE $200 each weekend you’re up $1600 a month compared to your old activity. $1600 a month for a year comes to $19200 a year – that’s basically $20000 dollars a YEAR!

And now for the real kicker.

When you find an activity you really enjoy AND makes you money (don’t worry…you will find it) you will soon realize that if you can make an extra $200 each weekend, you can double that, then double it again, then double it again, then find trustworthy employees and triple it – then triple it again.

Guess what?

Now you’re making more money from your past-time than your day job.

I’m not saying you should quit your day job once you get to this point, because you may enjoy your day job – but it’s an option.

As I’ve mentioned before, that’s exactly what happened to me.

I ended up quitting a cozy job with the airlines to become a full time internet marketer.

I didn’t become a guru (can’t handle the robe, long hair, and incense) – I just wrote about my trials and tribulations dealing with my early years of bankruptcy and debt – eventually my writing was read by enough people each day I was making a full time living.

I was never “connected” with the gurus in the blogger world either. I just wrote stuff and Google displayed it in their search engine.

I know someone whose passion is gardening and she turned it into a business.

Another turned their photography work into a business.

And another who is a tattoo artist did the same thing. He’s now living in Los Angeles inking the stars.


There are many activities you can do that make money. The one caveat is that you have to find a past-time that MAKES money.

There are many hobbies that cost money – you need to forget about them. You have an opportunity to improve your life (and your family’s life) forever.

Step 5.) Never Give Up and Never Forget!

This final step is so important.

I know from personal experience that once I’d accomplished all of the these steps I got complacent.

I figured I was bullet proof and I thought that I was smart enough to earn more money no matter what happened with my business.

You know what happened.

Yep….I spent like crazy and never socked some of the cash away. When there was a down turn in our business I was stressed again scrambling to get things back on track. We had to make drastic changes to right the ship again.

After two cycles of this craziness we sold the RV, sold the extra car, sold the big house and paid off ALL debt. Once we were debt free we started squirreling away some savings for the tough times – those times when our business takes a hit – and most business models have these natural swings.

If you have any experience with self-employment you KNOW exactly what I’m talking about – there a good years, amazing years, and scary as hell years.

But it’s SO worth it to be free!

You can make those scary years much less scary when you have zero debt and some money saved. At least then you have time to regroup and rebuild your income streams.

When you find a way to earn some serious cash and you’ve experienced downturns then it’s inevitable you will want to create different streams of income. This is the secret of the millionaires and billionaires – they never rest easy on what they’re making – they keep feverishly going forward (something I’ve never been able to do because I’m naturally lazy).

I’m not suggesting you became a rank workaholic – I’m just suggesting you focus on activities you might enjoy that make money. When you taste the sweetness of financial success you may want to work more.


Never Forget What Debt and Despair Felt Like

If you make the necessary changes you will be debt free some day and when that day comes never forget what it felt like when you were deep in debt and despair.

Stay vigilant and stay on course.

Don’t Panic – It’s Not a Race

I know some who read this will think I’m too extreme and you don’t want to make so many big changes.

I get it.

But ask yourself how you want to live the rest of your days on this earth. Do you want to work a “job” you sort of like and hope you don’t get laid off?

Or do you want to do something you enjoy and never worry about money again. You know the answer to that.

You don’t need to make these changes quickly. This entire process took me 6 years to complete. You just take baby steps at first. Just start by suspending all costs for the want items and chop up the credit cards with the highest interest rate. You can ease your way through the rest.


Don’t Beat Yourself Up!

This is one point I don’t mind belaboring.

I mention this in almost ALL my posts when I’m discussing crippling debt.


You have plenty of company but you’ll never know it because most of them are too ashamed to talk about it.

In the years before I claimed personal bankruptcy (20 years ago) I was extremely stressed out and the biggest reason I felt stress due to shame.


I was a walking talking bag of shame.

I dreaded the thought of my family, friends, and co-workers finding out I was fool and a failure.

I was petrified by the idea that I may not have credit for years after I claimed bankruptcy. The stress became depression, and the depression became agoraphobia, and my life was a living hell.

I thought I was surely dying. Really – I had my doctor’s cell number and he would let me call him when I was ready to fall off the edge of the world. Thank god for my wife and family through that time.

Nope. I was going through something that millions of others go through – nothing unique or special about it.

Debt is natural at some stages of life. The way things are these days it’s amazing that not all working people are teetering on bankruptcy.

Just follow these 5 steps (or create your own steps) but don’t think for a moment you don’t have a way out. This is all temporary and you can change it.

Maybe not today – maybe not tomorrow. Maybe not this week, month or year.

Just plant these steps in your head and plan to deal with your debt. If you do that, some day in the future you’ll wake up and take action – once you start taking action you are going to feel A WHOLE LOT BETTER.

I truly hope this helps you in some way.



Brent Truitt is a full time Internet marketer and part time blogger who lives in Canada and the United States. You can connect with him on Twitter @IAmBrentTruitt    




  1. Great advice Brent! I think keeping track of your expenses one of the best steps anyone can take – I’m always blown away by how much people /think/ they spend, compared to how much that /actually/ spend. (I’m sure they are too, most of the time).

    • Hi there Ms. Rich,

      Thanks for stopping by. It still amazes me when I look at our credit card statements at tax time to see how many purchases go through in a month. Hard to believe we’re actually saving money each month.

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