Total US household debt hit $17.94 trillion at the end of 2025, and individual stories behind that number are staggering. The average American household carries $6,500 in credit card debt, $37,000 in student loans, and $24,000 in auto loans. When you add it up, the typical person under 40 owes between $30,000 and $70,000 in non-mortgage debt. Minimum payments on that amount can easily consume $500 to $1,200 per month — money that could be building wealth, funding a vacation, or creating actual financial security. If you are tired of sending money to creditors every month and getting nowhere, this is your step-by-step plan to get out of debt in 2026.
Getting out of debt requires two engines running simultaneously: a clear repayment strategy and enough income to fuel it. While you follow the steps below, tools like I am Beezy let you earn $5 to $15 per day from your phone by viewing content — supplemental income that accelerates every payment and shortens your timeline by months or even years.
Step 1: Face the Full Picture
List every debt you owe — all of them
The first step is the hardest and the most important: write down every single debt. Credit cards, student loans, auto loans, personal loans, medical bills, money owed to family — everything. For each debt, record the creditor name, total balance, minimum monthly payment, interest rate, and due date. Most people discover they owe 10% to 20% more than they thought because they avoided looking at the full picture.
| Debt | Balance | Interest Rate | Minimum Payment | Payoff Order (Snowball) |
|---|---|---|---|---|
| Medical bill | $800 | 0% | $50/mo | 1st |
| Store credit card | $1,200 | 26% | $35/mo | 2nd |
| Visa credit card | $4,500 | 22% | $90/mo | 3rd |
| Car loan | $12,000 | 6.5% | $350/mo | 4th |
| Student loan | $28,000 | 5.5% | $300/mo | 5th |
| Total | $46,500 | $825/mo |
Calculate your debt-to-income ratio
Divide your total monthly debt payments by your gross monthly income. If you pay $825 per month on debt and earn $5,000 per month gross, your ratio is 16.5%. Under 20% is manageable with aggressive repayment. Between 20% and 40% requires lifestyle adjustments and extra income. Above 40% means you may need to explore debt consolidation or professional help. Know your number — it determines your strategy.
Step 2: Choose Your Repayment Strategy
The Debt Snowball — momentum through quick wins
Pay minimum on everything, then throw every extra dollar at your smallest balance. When it is gone, add that payment to the next smallest. Dave Ramsey has built an empire on this method because it works psychologically. Paying off the $800 medical bill in month one creates a feeling of progress that is addictive. That momentum carries you through the harder, larger debts.
The Debt Avalanche — save the most interest
Same concept, but order your debts by interest rate instead of balance. The 26% store card gets attacked first, then the 22% Visa, then the 6.5% car loan. This saves you more money in interest over the total payoff period. If you are motivated by math more than emotion, the avalanche is your method.
The hybrid approach — the best of both worlds
Start with snowball to build momentum (knock out 1 to 2 small debts for quick wins), then switch to avalanche for the remaining larger debts. This gives you the psychological boost of early victories and the mathematical efficiency of targeting high interest. Most financial advisors now recommend this hybrid approach.
Step 3: Find Extra Money to Throw at Debt
Cut expenses strategically
Go through your last 3 months of bank statements and highlight every non-essential expense. You do not need to cut everything — that is unsustainable. Instead, identify 3 to 5 categories where you consistently overspend. Common targets: eating out ($200-400/month for the average American), subscriptions ($100-200/month), impulse online shopping ($150-300/month). Cutting these by 50% — not eliminating them — can free up $200 to $400 per month for debt payments.
Increase income without a second job
Traditional advice says "get a second job," but adding a 20-hour-per-week commitment on top of your existing work leads to burnout. Flexible income is better. With I am Beezy, you earn money by viewing content on your cell phone — videos, articles, and ads that generate real earnings. Spend 20 to 30 minutes during your commute, lunch break, or evening wind-down and earn $150 to $300 per month. Apply every cent to your target debt.
Sell things you no longer need
The average American home contains $3,000 worth of items that could be sold on Facebook Marketplace, OfferUp, Poshmark, or eBay. Old electronics, clothing, furniture, sports equipment, tools — turn them into debt payments. A weekend of listing items can generate $300 to $800 in one-time income.
Step 4: Protect Your Progress
Stop adding new debt immediately
Cut up credit cards, remove them from your phone's digital wallet, and unlink them from online shopping accounts. If you cannot pay cash for something, you cannot afford it — full stop. The single biggest reason people fail at debt payoff is that they continue accumulating new debt while trying to pay off old debt. It is like bailing water out of a boat with a hole in it.
Build a $1,000 emergency cushion
Before going all-in on debt repayment, set aside $1,000 in a separate savings account. This prevents the cycle where an unexpected car repair or medical bill goes right back on a credit card. That $1,000 buffer is the foundation that makes the rest of the plan work.
Track your progress visually
Print a debt payoff tracker and put it on your fridge. Color in the progress as each payment is made. Watch the balances shrink. Share milestones with an accountability partner. Paying off debt is a marathon, and visual progress keeps you running when motivation dips.
Common Questions About Getting Out of Debt
How long will it take to get out of debt?
It depends on your total debt, interest rates, and how much extra you can pay per month. Using the example table above ($46,500 total), paying minimum only takes 12+ years. Adding $500 per month extra (from cuts and supplemental income) cuts it to approximately 4 years. Adding $800 per month extra drops it under 3 years. Every extra dollar matters exponentially because of reduced interest.
Should I use my savings to pay off debt?
Keep $1,000 as your emergency fund — do not touch it. If you have savings beyond that, and your debt interest rate is higher than your savings interest rate (almost always true for credit cards), use the excess savings to pay down high-interest debt. Earning 4.5% on savings while paying 22% on credit cards means you are losing 17.5% net.
Will paying off debt improve my credit score?
Yes. Paying down credit card balances reduces your credit utilization ratio, which is 30% of your FICO score. Eliminating accounts in collections and establishing consistent on-time payments also helps. Most people see a 50 to 100 point increase within 6 to 12 months of aggressive debt repayment.
What about debt consolidation or settlement?
Debt consolidation — combining multiple debts into a single loan with a lower interest rate — can work well if you qualify for a good rate and commit to not accumulating new debt. Debt settlement — negotiating to pay less than you owe — damages your credit and often involves fees. Try the strategies in this guide first. Settlement should be a last resort before bankruptcy.
Your Debt-Free Future Starts With One Step
Grab a piece of paper and write down every debt you owe — right now, before you close this page. That list is your roadmap. Choose snowball or avalanche, find $200 to $500 in monthly savings from cuts and extra income, and start attacking. If you need extra fuel for the journey, join I am Beezy for free and start earning from your cell phone today. Every dollar you earn and apply to debt brings you one step closer to the day you owe nothing to anyone. In 2026, that day is closer than you think.
