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Do This First If You Want to Get Out of Debt


You’ve made the decision to get out of debt. So now what?

Some people never get beyond this point because they don’t know where to start. The big picture is overwhelming, so people often quit before they ever write the first check to pay off a debt. But you don’t have to worry, because you’re about to discover the first step toward saying goodbye to debt!

Before you learn this secret, you need to be forewarned: This step may surprise you. It will seem like the wrong thing to do. You won’t guess it offhand because most people don’t think it has anything to do with getting out of debt. Are you ready?

The first step is this: Save $1,000 as fast as you can.

You weren’t expecting that, were you? Why would anyone put money in a savings account instead of using it to pay off debt?

Because life happens.

Think of your emergency fund as a safety net. Saving first allows you to get in the mind-set of being in control of your money. It forces you to make a change. Saving money can actually become addicting once you see you can do it!

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We don’t know when a storm will come our way, but we know rainy days do come eventually. Your air conditioner breaks in the middle of July. Your car has a busted transmission. Your kid breaks their arm at baseball practice. Surprises like these are a part of life. But if you have $1,000 in an emergency fund, you won’t have to go deeper into debt when the inevitable comes your way.

Jump-Start Your Savings Fund

If you’re serious about getting out of debt, work as hard as you can to put away $1,000 quickly. Here are a few ideas!

Make a budget.

Zero-based budgeting is essential to your financial success. Your budget is the key to saving your $1,000 emergency fund. It will show you where you’re overspending and where you can cut back to save instantly. But if you don’t make a monthly budget, you’ll never know how many different areas you could be saving in.

Scale the grocery budget way back.

We know it might sound impossible, but it is doable! Make a shopping list and stick to it. Stop purchasing “wants” and only purchase necessary items. If you cave in to impulse purchases when walking down the aisles, consider doing curbside grocery pickup. Switch to store-brand products. Challenge yourself to get creative and only cook with the items left in your pantry. Make slow cooker meals and see how far they’ll help you stretch your groceries throughout the week.

Purge the house.

Sell the mysterious items in the attic and the clothing you didn’t even know was lurking in your closet. Get rid of the high-priced jewelry you bought to keep up with the Joneses. Sell the boat. Sell the car. Look for social groups or websites like VarageSale and Craigslist to sell everything you’re not using. After all, one person’s trash is another person’s treasure.

Find ways to bring in extra cash.

Are you a great photographer? Can you knit masterpiece blankets in no time? Now is the time to use your hobbies or skills to generate extra income. Look for opportunities to work overtime.

If your job doesn’t give you that option, consider finding an extra gig to take on during weeknights or the weekend. Sure, it might not be glamorous delivering pizzas or stocking canned goods at the grocery store—but then again, swimming in debt isn’t too glamorous either.

Decide what you can live without.

Are you ready for some 21st century sacrifice? Go through your bills and cancel any needless memberships and subscription services. Wave goodbye to that unused gym membership and monthly magazines you never read! Maybe it’s time to ditch the cable (and even Netflix) and get to know your DVD collection once again.

Look at it this way: If you’re working an extra job, do you even have time for binge-watching numerous TV shows? A little bit of sacrifice for a period of time can add up to extra cash in your pocket pretty quickly!

Once you’ve reached the magic number, take your money to the bank. Don’t keep it at home—you’ll use it because it’s there! You’d be amazed at how easy it is to justify an “emergency” when you forget to get cash for a field trip, the pizza driver needs a tip, or your co-workers are pooling money for a farewell gift. Instead of tempting yourself with cash on hand, open a savings account separate from your regular checking account. Put your $1,000 in it and leave it alone. Don’t touch it. It’s for emergencies. (Oh, and a clearance sale at your favorite store is not an emergency.)

You Can Do It

A safety net for the unexpected isn’t the only plus in starting your emergency fund. This first step also gives you confidence, a feeling of accomplishment, and a sense of control. This step proves you can save money. You can control your behavior. You’ve discovered the power of intense focus and determination. Now keep using those skills to tackle the next step—getting rid of your debt.

Hey—it's way easier and goes way quicker when you've got the info and tools you need to keep you on target and on fire. And that's exactly what's inside Ramsey+. You'll get our best money courses like Financial Peace University, the premium version of the EveryDollar budgeting app, and our new money goal tracking app called BabySteps.

Right now you can try it all in a Ramsey+ free trial. So do that! Jump in and see what's already helped the almost 10 million people who have already followed this plan. You can do this. You. Really. Can.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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