How to Get Out of Debt: A Practical Step-by-Step Guide

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How to get out of debt using budgeting, savings, and proven repayment methods

Debt is one of the fastest ways to feel stuck financially.

You earn money, but it disappears.
You try to save, but repayments swallow everything.
You want to invest, but debt keeps pulling you backwards.

If this sounds familiar, you are not alone. Millions of Nigerians are trapped in cycles of loans, buy-now-pay-later plans, cooperative deductions, and personal IOUs.

The good news is this:

Debt freedom is not about earning more money first.
It is about structure, strategy, and consistency.

In this guide, you will learn:

  • How to assess your debt honestly
  • How budgeting becomes your escape route
  • How to save while paying off debt
  • How to use the Debt Snowball or Debt Avalanche method
  • How to stay debt-free permanently
  • The exact tools that make the process easier

No shame. No motivation talk. Just a system that works.

Why Getting Out of Debt Matters More Than Investing Right Now

Many people rush into investing while still drowning in debt. This is usually a mistake.

Here is why:

  • High-interest debt grows faster than most investments
  • Debt reduces your monthly cash flow
  • Debt creates emotional and mental stress
  • Debt delays wealth building

You cannot build wealth efficiently while your money is leaking.

Debt freedom is the foundation. Investing comes after.

This principle is central to what I teach in Rich, Young & African: you don’t build wealth by stacking strategies; you build it by fixing leaks first.

Step 1: Get Clear on Your Debt (No Guessing Allowed)

You cannot escape what you refuse to measure.

Start by listing every single debt, including:

  • Credit cards
  • Personal loans
  • Salary advances
  • Buy-now-pay-later plans
  • Cooperative loans
  • Friends and family IOUs

For each debt, write down:

  • Creditor
  • Total balance
  • Interest rate
  • Minimum monthly payment
  • Due date

Most people are shocked when they see everything in one place.

This is exactly why I created the Debt Repayment Template inside my Debt Repayment Course, It organizes everything automatically, so nothing is hidden.

Step 2: Create a Budget That Actually Helps You Pay Debt

Budgeting is not about restriction.
It is about control.

If your budget does not free up money to attack debt, it is useless.

A debt focused budget should:

  • Prioritize essentials
  • Eliminate silent leaks
  • Create a debt attack fund
  • Still allow for small enjoyment (to avoid burnout)

The Simple Debt Budget Structure

  1. Income
    • Salary
    • Side hustle income
    • Freelance earnings
  2. Essentials
    • Rent
    • Food
    • Transport
    • Utilities
  3. Minimum Debt Payments
    • This keeps you compliant
  4. Debt Attack Amount
    • Extra money to accelerate repayment
  5. Savings (Yes, Still Save)
    • Even if small

If you struggle to build this, my Budgeting Course walks you through it step by step using real Nigerian examples.

Step 3: Save While Paying Off Debt (This Is Not Optional)

Many people think:

“I’ll save after I clear debt.”

This thinking backfires.

You need a small buffer to avoid going back into debt when emergencies happen.

What to Do Instead

  • Save ₦50,000–₦200,000 as a starter emergency fund
  • Keep it separate
  • Do not touch it for debt payments

This protects your progress.

In my Ultimate Debt-Free Blueprint (Combo), this step is built directly into the plan so you don’t relapse.

Step 4: Choose a Debt Repayment Strategy

There are two proven methods. Both work. The best one is the one you can stick to.

Option 1: The Debt Snowball Method (Best for Motivation)

How it works:

  1. List debts from smallest to largest balance
  2. Pay minimums on all debts
  3. Attack the smallest debt aggressively
  4. Once cleared, roll that payment into the next debt

Why it works:

  • Fast wins
  • Psychological momentum
  • Builds confidence

This method is excellent if debt has drained your motivation.

Option 2: The Debt Avalanche Method (Best for Speed & Interest Savings)

How it works:

  1. List debts from highest interest rate to lowest
  2. Pay minimums on all debts
  3. Attack the highest-interest debt first
  4. Roll payments forward

Why it works:

  • Saves more money long-term
  • Clears debt faster mathematically

This method is ideal if your debts carry heavy interest.

👉 Not sure which to use?
My Debt Repayment Course includes calculations that show you the difference so you can choose intelligently.

Step 5: Increase Cash Flow (Without Burning Out)

You can speed up debt repayment by increasing your income slightly.

Options that work well during debt payoff:

  • Freelancing
  • Weekend services
  • Digital products
  • WhatsApp mini-commerce
  • Consulting
  • Overtime or bonuses

You do not need to double your income.
Even an extra ₦30,000–₦100,000 monthly can cut years off your debt timeline.

This is why No Capital? No Problem exists to help you generate income without adding stress.

Step 6: Track Progress Monthly (This Is Where Most People Fail)

Debt repayment fails when people stop tracking.

You must:

  • Review balances monthly
  • Celebrate progress
  • Adjust payments
  • Stay emotionally engaged

Tracking turns debt from a monster into a project.

The Ultimate Debt-Free Blueprint combines budgeting, tracking, and strategy in one system so you don’t lose momentum.

Step 7: Avoid These Common Debt Traps

If you want to stay debt-free permanently, avoid:

  • Lifestyle inflation after clearing one debt
  • “Rewarding yourself” with new loans
  • Ignoring small subscriptions
  • Lending money while in debt
  • Using credit to fund emotions

Debt freedom requires temporary discipline for permanent peace.

How Long Does It Take to Get Out of Debt?

This depends on:

  • Total debt
  • Interest rates
  • Monthly commitment
  • Extra income

Most people could clear debt in 18–36 months if they had structure.

Structure beats motivation every time.

How This Fits Into My Wealth Framework

Debt freedom is the first pillar of wealth.

That is why my products are designed in this order:

  1. Budgeting Course → Control your money
  2. Debt Repayment Course → Eliminate financial pressure
  3. Ultimate Debt-Free Blueprint → Combine both and accelerate results
  4. Rich, Young & African → Build long-term wealth

You don’t invest your way out of chaos.
You organize your way into freedom.

Final Thoughts: Debt Is Not a Life Sentence

Debt does not mean you failed.
It means you need a system.

With:

  • A realistic budget
  • The right repayment strategy
  • Consistent tracking
  • Proper tools

You can become debt-free faster than you think.

Start here:

  • Get the Budgeting Course
  • Enroll in the Debt Repayment Course
  • Or take the fastest route with the Ultimate Debt-Free Blueprint

Your future self will thank you.

Frequently Asked Questions (FAQs)

1. Should I save or pay debt first?
Do both. Build a small emergency fund, then focus aggressively on debt.

2. Which is better: snowball or avalanche?
Snowball builds motivation. Avalanche saves more interest. Choose what you’ll stick to.

3. Can I invest while in debt?
Only after high-interest debt is cleared.

4. How much should I budget for debt repayment?
As much as possible after essentials. Even small amounts compound.

5. What if my income is too small?
Focus on structure first, then increase income strategically.