How to Get Out of Debt: Step 1 – Acceptance

In this series, we're detailing in four steps how you can get out of debt for good. The first step? Acceptance and figuring out how much you owe.
This is the first our of a four post series on getting out of debt. You can go here to read Part 2, and here to read Part 3.

The first time I calculated how much debt my husband and I actually had, I was in complete shock. We had been living a pretty simple lifestyle, but had somehow amassed $45,000 of debt, a combination of student loans, car loans, and credit card debt.

We allowed ourselves to feel financially invincible with the monthly payments we had, but the truth was we couldn’t afford the lifestyle we were living. We were constantly borrowing from next month’s paycheck to pay for the previous month.

If you find yourself in a similar debt situation, know that you are not alone. 69% of Americans report to have some type of non-mortgage debt, according to a report by the Will Franklin TN.

In this four-part series, I’ll show you the steps you can take to get out of debt once and for all. While I’m no financial expert, I (along with my husband) paid off $45,000 of debt in 45 months. We did this despite my husband barely earning above minimum wage during this time frame and living in one of the most expensive areas of the country.

If you’re serious about getting out of debt, read on.

Accept Your Debt

One of the hardest things to do when first getting on the debt payoff journey is to truly accept your debt.

I remember when I first realized I wanted to get out of debt. I considered our credit card debt as our “only” debt, completely failing to recognize the car loan or student loans.

Mainstream society has ingrained in us that there is “good debt” and “bad debt,” and for this reason, we shouldn’t be too concerned with getting into debt for good reasons, such as getting a college degree.

But the reality is that the millennial generation is drowning in student loan debt, and it’s hurting the economy. Millennials can no longer afford to achieve other financial milestones like purchasing a home due to their student loan obligations.

Debt is debt. Good or bad, it doesn’t matter. If you’re serious about paying off debt, accept that you have a debt total and how you got there is no longer relevant. What matters now is how you’re going to pay it off.

Serious about paying off #debt? You have to accept your debt for what it is and find your total Share on X

Calculate Your Debt

Now that you’ve accepted that your good and bad debt combined make up your total debt, it’s time to figure out how much debt you owe.

This means adding up every credit card balance, every student loan, every car loan, and any other outstanding line of credit that you pay a monthly balance on. Do you owe money to family members or friends? Add those debts to the list, too.

If you find yourself saying “Well, that’s not really debt…,” chances are it probably is and you should add it to the total.

Now that you’ve accepted your debt and have your total debt calculated, you can move on to Step 2.

When you first got serious about paying off debt, did you have a hard time accepting your situation?