How to Become Debt-Free in 4 Steps (2019 Guide)


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Written by Chad Zollinger | Last Updated November 6th, 2019
Chad Allen Zollinger is a Content Management Specialist for Best Company. Majoring in Writing Studies, Chad is an avid reader, a lifelong writer, and once completed the Rubik's Cube in 34 seconds.

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Debt doesn't just disappear because we want it to go away. Many of us have friends and family who have lost jobs, been overburdened by student loans, or seen their credit scores plummet after missing credit card payments. Some of us have even experienced those heartbreaking problems for ourselves.

But, no matter how far in debt you find yourself, a debt-free life is perfectly attainable with dedication and a personalized financial plan.

This article is your do-it-yourself plan for debt freedom. We'll tell you exactly what you need to do now (in 2019) to become debt free down the road.

You'll learn how to do the following:

  • Earn and save money
  • Find the most affordable debt relief services (debt settlement or debt consolidation)
  • Avoid or resolve college debt
  • Avoid or resolve business debt

The only ingredients you need to add are commitment and hard work.

1. Learn how to earn and save money

Since you're the only one who can truly ensure your financial wellness, you will likely need to make a few life changes.

The habits that people in debt find hardest to kick are eating out, building credit card debt, shopping unnecessarily, drinking and smoking, and not having a budget.

The point of kicking habits like smoking and eating should primarily be for your health. But did you know you can save almost $30,000 over ten years by kicking cigarettes today? Imagine how much money you would save if you kicked every bad habit you had.

A thorough and helpful budget will help you curb all of the money-wasting habits that plague your life. Getting out of debt is much easier when you prioritize your spending.

Take a look at our resources for managing an effective budget:

How to Establish Financial Goals

When you want something badly enough, you do anything within your power to obtain it, right?

Unfortunately, it's a little bit harder when you're trying to achieve financial wellness. When it comes to getting out of debt, you need to set specific goals for which you should be striving every day.

Here are the goals for which you should be aiming:

  • Establish an emergency fund
  • Free yourself from debt
  • Create another stream of income
  • Tackle the issue of insurance
  • Learn how to stop impulse buying
If you are undisciplined financially, your profits may still increase, but so will your impulse purchases, as well as the sum needed for your three months of living expenses. You might even feel more comfortable applying for heftier loans.
And if your profits are growing, your assets become more valuable and protecting them becomes paramount. Instead of waiting for a personal financial crisis to wake you up, start now to establish financial goals that provide security and peace of mind.

Is Your Appetite Costing You Money?

Examine your habits to discover where you are spending too much. The answer can be as plain as what is on your plate. Are your bad food habits the reason you can't pay your bills?

Another habit that can be detrimental for some is smoking and alcohol. Though the habit of eating out will save you some money, you still have to go shopping to replace the food you would have eaten at a restaurant.

The advantage of kicking cigarettes to the curb is that you don't have to replace the habit with another one. Therefore, you are saving a lot more money. This principle is similar when it comes to drinking alcohol.

Spending on unhealthy stress relief (alcohol/cigarettes) is simply another way we tie ourselves down to our debt. Be especially wary of habits that become addicting -- whether it's an addiction to soda or to alcohol, our addictions will lead to unhealthy spending habits.

The 10 Best Budgeting Strategies for the Holiday Shopping Season

Before you start thinking about setting up your budget, you need to answer one question: what financial assets do you have right now (including money saved)?

It's okay if you're starting out with nothing. The point of a budget is to begin your process of saving money, little by little until you have enough to pay off your debt.

For those worried about how to get through the holidays, check out the Christmas Gift Priority Chart to establish your allowance for Christmas shopping and your priority for gift giving.

Other budgeting strategies include the following:

  • Avoiding impulse buys
  • Secret Santa/family gift exchanges
  • Use a 0 percent credit card
  • Layaway programs
  • Keep the receipts
  • Post-Christmas sales
  • Use the Amazon discount finder
  • Prioritize experiences over gifts
  • Feed the hungry

2. Learn how to find the best debt relief company

Debt relief is for those looking to escape deep debt. Though budgeting is still necessary for those in debt, you may need some extra help paying off your existing debt.

If you find yourself struggling to make minimum payments and have even missed multiple payments, you could benefit from a debt consolidation loan or a debt settlement.

Otherwise, bankruptcy is your only option to get rid of heavy debt. Unfortunately, the debt relief industry is littered with companies looking only to make a profit.

Make sure you research on the most trusted review sites and check as many customer reviews as you can before going with a debt relief company.

Only Use Trusted Review Sites

Use a review site that does not auction off the top spots to the highest bidder. Instead, your favorite review site should rely on customer reviews and a set of standard criteria to grade companies.

Find three companies that pique your interest and read in-depth reviews for each of them.

Do a side-by-side comparison between the three companies to identify which company is right for you.

side-by-side comparison of two companies

Here are the three most important criteria to focus on when it comes to choosing the perfect debt relief company:

  • Price/Fee (percentage of total debt)
  • Negotiation Experience
  • Customer Satisfaction

Freedom Debt Relief vs. National Debt Relief

The first two companies you will hear about when you begin researching debt relief companies are National Debt Relief and Freedom Debt Relief.

They are national brands that have settled millions of dollars of debt.

Freedom Debt Relief has received great customer reviews on On the other hand, National Debt Relief has reportedly lower fees. So, how do you know which company is better? Our guide will take you through this pros and cons of each company.

National Debt Relief:

  • Fees down to 18 percent of debt
  • Low minimum debt requirement ($7,500)
  • Average savings of 30 percent of the enrolled debt

Freedom Debt Relief:

  • Debt settlement experience since 2002
  • Over $9 billion resolved
  • 4.7 stars out of 5 (as of September 2018)

Consumer Reviews: How To Spot The Wolves Among The Sheep

93 percent of all online customers read reviews before deciding whether a company is good or bad for them.

This number illustrates the overall importance of online reviews, but also demonstrates how important accurate reviews are when it comes to making a buying decision. This is especially true when it comes to choosing a financial institution or debt relief company.

With reports of fake and suppressed reviews, consumers are grasping for any and all trustworthy sources of reviews. As a consumer, you need to know the signs of a bad company before making a choice.

3. Learn how to avoid or resolve college debt

Life is hard enough without the burden of student loan debt. Luckily, there are options for student loan forgiveness both within the debt relief industry and outside of it.

But the whole process is a whole lot easier if you don't accrue college debt in the first place. Here's everything you need to know about saving for college and getting out of debt:

Top Tips for Saving for College in 2019

To get through college without a penny of debt, focus on two important things:

  • Save up money before starting college.
  • Find the best student loans and grants (only if you need one).

You can also take college classes while still in high school. You can actually finish your first two years of college in high school -- it takes a lot of hard work and dedication, but it can save you a ton of money.

Four Fun College Job Ideas to Help You Combat Student Debt

Want some extra pocket change or another source of income to get you through the rigors of college life? Here are four awesome jobs for college students:

  • Tour guide
  • College event staff
  • Cafe barista
  • Bookstore employee

Obviously, there aren't an infinite number of jobs that are perfect for a college student. A college student needs work that has flexible hours, fair pay, and, preferably, training and education opportunities.

Make an effort to find paid internships in your field. These internships will be your key to finding a career.

4. Learn how to manage business debt

One of the best ways to thrive in a troubled economy is to own your own business — but that doesn't mean it isn't a huge risk.

Around 90 percent of new businesses fail. It isn't a new problem. It's been happening for years.

Bad financial management and poor planning lead to business failure. While business owners may feel that they are experts in their industry and don't need to study in order to thrive, they need financial education just as much as they need business education.

Here are a few tips on how to run a successful business:

9 Fantastic Ways to Manage Cash Flow for Your Small Business

Your business operates on one fundamental principle: money. If you don't have it, operations halt. Sometimes, business owners experience a period of crisis, where every penny goes a long way.

Effective cash flow management can be the difference between total ruin and clear financial skies.

Take a look at these great ways for small business owners to manage cash flow:

  • Track your spending with software
  • Create a subscription-based payment system
  • Sell your invoices
  • Use personal funds to get things going
  • Call your debtors
  • Be more frugal
  • Always have a reserve
  • Pick a better merchant services provider
  • Create a long-term financial plan

Proven Tips for Managing and Motivating Millennial Employees

The truth is hard: most people view millennials as lazy. This may be because of their preference for work-life balance and independent work over the traditional 9-5 work structure.

Though young people do love their independence, that doesn't mean they don't respond well to leadership. Recognizing their potential and offering them a sense of direction is a worthwhile investment because they’re avid learners, and they’ll repay you with their dedication and hard work.

Another way to manage millennials is to incentivize their efforts. Recognize their achievements and award them for reaching specific goals.

Though the number of financial problems you can have is endless, a solid financial plan will help you lay the groundwork for a sound financial future. Your success will ultimately depend on your dedication to your financial plan.

The Top Debt Relief Companies

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#1 Freedom Debt Relief chevron_right
9.9 Overall Score
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#2 National Debt Relief chevron_right
8.6 Overall Score
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#3 Pacific Debt Inc. chevron_right
8.3 Overall Score

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