Debt is crushing us. It crushed me for a long time. 

When you’re in debt, it can feel like there’s no way out. That’s how I felt. The stress and anxiety followed me around and impacted every aspect of my life. It was really important for me to become debt free. Perhaps you’ve felt or feel the same. 

While there are a lot of reasons we’re struggling with money as Americans, the facts are the facts. Almost two-thirds of us are living paycheck-to-paycheck. Our average credit card debt is over $6,000. Almost half wouldn’t be able to come up with $400 cash in an emergency. 

Here’s where I’m coming from- I spent most of my 20s living above my means, in and out of credit card debt, not saving enough money, and not paying attention to my finances. All of it while I was working as a financial advisor.

Today, I’m debt free and on track to meet and exceed all my financial goals. I’ve been named to Investopedia’s list of the top 100 financial advisors many years in a row. I share all that because I’m not wagging my finger at you, or trying to shame you if you’re in debt. 

I’ve also never taken a vow of poverty, and don’t expect you to either.  

I want you to be free of stress, anxiety and concerns about money. To have financial peace of mind, and to be on track to meet and exceed all your financial goals. The first step to doing that is to become debt free. 

Before I go any further, you can access our Get Out of Debt course for free and I encourage you to take advantage of it. 

Finally, you’re not going to have any trouble understanding this. Whatever your current level of financial literacy or understanding, you’re fully capable of completing the steps I’m going to share. 

Here’s what we’ll cover:

  • The problem of credit
  • How to get organized 
  • Knowing your financial facts
  • Creating your debt free plan
  • The way forward

Let’s get started.

The problem of credit

I remember a time, before credit cards, when I could run out of money. Do you?

When I was a teenager and I spent all my cash, that was it. I lost the ability to consume anything else. As adults, credit cards allow us to keep spending, regardless of whether or not we have cash. 

In case of an emergency, I’d rather have access to a credit card than to not, but that shouldn’t be our emergency fund. 

I can only speak for myself, but credit cards caused me to spend too much. They allowed me to live beyond my means. 

How to get organized

Many of us (myself included for a long time) don’t know how much we spend, how much we earn, how much debt we have, and what our net worth is. Do you? 

When it comes to getting out of debt, we’ve gotta know what we’re working with. Whatever method you prefer, pen and paper or electronic, create a list of all your debts. Include the total amounts, interest rates, name of the lender, and monthly minimum payment amount. If you have a significant other, you should do this together. 

At the top of the paper or document write, “I will be debt free.” This simple and straightforward action is your first step in your debt free journey. 

Knowing your financial facts

When it comes to personal finance, your “facts” are cash flow, budget, credit, goals, and values. You need to make sure you know yours. 

Cash flow

This is money in and money out. What you earn and what you spend. 

Humans have a tendency to avoid addressing problems. When we’re behind financially, it can cause us to stop paying attention. But, that’s obviously not a good idea. No matter how painful it may be, we need to monitor our cash flow at least once a month. 

Log into every account you spend money with and review all the transactions. I can almost guarantee you’re going to discover you’re paying for things you no longer use or value. When this happens, stop paying for them. 


I get it. I don’t love budgeting. In fact, my wife keeps our household budget. That being said, I recognize how important budgeting is. Simply put, it’s a plan for your money. 

It lets us know if we’re spending too much, if we’re on track to meet our goals, and whether or not we can afford to do something. Once you get in the habit of keeping a budget, I think you’ll enjoy the feeling of certainty it gives you. 

There are a lot of ways to budget, here are some additional posts on it as well as past podcast episodes:

Budget Categories: Getting Clear on Wants Versus Needs

How to Become Debt Free Using Goals Based Budgeting

Debt Free: What to Do if You’re Over Budget and Feeling Stuck

You Need a Budget with Jesse Mecham

Making Budgets Work with Shanah Bell

If you’d like to dig deeper, you can check out our Get a Budget Course.


For better or worse, credit plays an important role in our lives. It helps determine where we live, the cars we drive, our insurance premiums, and even where we work. Because of this, we need to be good stewards of it. 

We do that by checking our credit report at least once a year. You can do this for free at sites like It’s estimated over 40 million Americans have something on their credit report that shouldn’t be there.

You should also monitor your credit score and you can get yours by contacting one of your existing creditors. 

Here are some additional posts on credit:

What Should My Credit Score Be Before Buying a House

How Do I Improve My Credit


Odds are, you understand the importance of goal setting. I did, but still didn’t actually write down my personal goals until I was 35. When we take the time to think about what we want our future to look like, we can make plans and work to bring it to life. When we don’t we’re leaving a lot up to chance. 

To help you get clear on the future you want, you can access our Goals course for free. 


Our values are the lens through which we see the world. They also inform how we spend, or allocate, our most important resources like money, time and attention. When you get clear on yours, you’ll know not only what you’ll spend money on, you’ll know what you won’t spend money on. 

To help you clarify yours, you can access our Values course for free. 

Creating your debt free plan

Once you’ve finished this post, you’ll have what you need to create your plan for getting out of debt. 

If after reviewing your cash flow and setting up your budget, you find you don’t have a lot of extra money laying around, you’ve got some decisions to make. You can either figure out how to earn more money, how to live on less, or a combination of the two. 

I wish there was a different answer, but there’s not. There’s no hack or shortcut to becoming debt free. 

In the intro, I mentioned that I never took a vow of poverty, and I don’t expect you to either. Your debt free journey may require you to make changes to your lifestyle, but they don’t need to be permanent. If you’ve got $6,000 in credit card debt, and you want to pay it off in one year, you need to come up with $500 a month. 

Is it possible to cut back on certain areas of your life for 12 months? Is it possible to pick up some extra work for 12 months? Can you cut back on your lifestyle for 12 months until you get free of your debt? Once you pay off your credit cards, you can always add back in what you took out. 

Most people aren’t willing to do this. 

If you’re not willing to do it, you’re going to have a hard time becoming financially successful. 

On the other hand, if you are able to make some tough decisions, you’ll set yourself up for long-term financial success and peace of mind. 

The way forward

I’m going to assume you’ve decided to do whatever it takes to get out of debt. Nice work. 

Here are the three most important financial rules for you to implement: Gold, Silver and Bronze (like the Olympics).

Gold: Pay yourself first

If you’re living paycheck-to-paycheck, you know how it feels to get to the end of the month and not have any money left over. We need to break the habit of paying everyone else first, and hoping to have money left over for us. 

We pay ourselves first by enrolling in our company’s 401(k) plan, opening an IRA, by setting up automatic contributions or transfers to our accounts at the beginning of every month. Even if you start setting 1% of your income aside, it’s important to get started.

Silver: Stay out of debt

This is what we’ve been talking about. Once you’re debt free, do everything you can to stay that way. 

Bronze: Diversify

Too often, we’re way too aggressive with our investing. It’s a mistake to put more than 5% of your net worth into any one investment like an individual stock or crypto asset. 

We take a diversified approach to our investing through things like mutual funds and ETFs. Low-cost, well-diversified investments should be the majority of your portfolio. Once you’re on track to meet your mid and long-term goals, you can look into investing in more concentrated investments like stocks or crypto, but not before. 

Finally, I want everyone to become financially prosperous. But that will never happen until everyone is financially secure. We become financially secure by getting six month’s worth of our monthly expenses saved in an emergency fund. 

This won’t be easy to do, but it’ll be worth it. Once you’ve got six month’s in cash, you’ve got financial peace of mind. While you may never be completely free from financial stress, this will get you pretty close. 

You can learn more by reading this post:

How to Get Good with Money: 7 Steps to Financial Prosperity


You’re someone who is capable and deserving of financial success. Set your intention and get started. 

If you’re ready to take control of your financial life, check out our DIY Financial Plan course. 

We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course. 

Connect with one of our Certified Partners to get any question answered. 

Stay up to date by getting our monthly updates.

Check out the LifeBlood podcast.

If you’d like help getting on the same page with your partner, check out our Same $ Page Course. 

If you’d like to help your kids get good with money, check out our Teaching Kids about Money course. 

LifeBlood is supported by our audience. If you purchase through links on our site, we may earn an affiliate commission. Learn more.