Stop, I'm Suffocating: Overcoming Unnecessary Debt

"I give up. I'll never get out of debt." I've heard it from a lot of people, and I understand why. When the balances pile up, they can wreck your finances for a stretch and drag your mood down with them. I mean actual depression. Debt that feels too big to handle leaves people ashamed and convinced nothing will change. But almost everyone hits money trouble at some point, and there is a way out of yours too.

Let me pause on one phrase before going further, because people hear "debt free" and picture owing absolutely nobody. That's not realistic. You will always owe something. Take property taxes. Maybe you've paid off your mortgage, which is wonderful, but stop paying the taxes on the land your house sits on and see what happens. The county takes the property. House included. The full value of it, gone. Most people never think about that one.

So when I say debt free, I mean free of the debt you didn't need in the first place. Unnecessary debt is the stuff you could have avoided: a stack of credit cards, old medical bills, cable or satellite packages, student loans in some cases. Then there are the costs that follow you no matter what you earn. Call those fixed expenses. Rent or mortgage, a car payment, health and life insurance, homeowners insurance. A few of those will be with you until the day you die.

Student loans sit in a gray area. Sometimes they really are a fixed cost you can't escape. But first ask whether you even need them to pay for school. If you don't, skip them. If you do, borrow only the exact figure that covers what you owe the institution and nothing more. Here's where students trip up: they take out more than tuition requires because they're thinking about right now, not later. They pad the loan to cover other bills, robbing Peter to pay Paul. That habit is why I'm sitting on more than $80,000 in student loan debt. Had I borrowed only what I needed, the number would be closer to $50,000. I'm paying for that choice now. You can still kick unnecessary debt where it hurts, though, same as I'm trying to.

One thing has to come before any of the steps below: you have to actually want to get your debt under control. If you're wondering why that matters, go ahead and stop reading. Debt does not clear itself. You are the one who has to make it disappear.

Start by figuring out exactly where your money goes. The first thing out of most people's mouths is "I have nothing left to pay off debt." How do you know that? Be honest. Write down every monthly bill you carry that isn't a fixed expense. Then write down your monthly take-home pay. If what you spend runs higher than what you bring in, either rework the budget or pick up a second job for at least six months.

Separate what you need from what you've talked yourself into needing. For a while, that means cutting back. If you drop $100 a week on a manicure and pedicure, learn to do your own nails and keep $400 a month that can go straight to a bill. I canceled cable and switched to Netflix and Hulu, which saved me over $200 a month. That's real money.

Build a budget and then actually follow it. A plan on paper keeps you from bleeding cash on things that don't matter. Eat out once a week instead of five nights. Once you start watching where it all goes, you hesitate before spending.

After you've tracked the spending, trimmed the waste, and set the budget, put whatever's left toward the balances. Any extra after the fixed expenses should go to debt, smallest bill first. For the bigger monthly obligations, call the creditor and ask about setting up a payment plan. Keep bankruptcy off the table as long as you can; it's the last option, not the first. If you do end up there, talk to an attorney about whether it's genuinely your best move. It can gut your credit score, but it also gives you a starting point to rebuild from.