Get Out of Debt: A Proven Plan for Individuals and Small Business Owners
If you're saying to yourself, "I need to get out of debt", you're not alone. From personal credit card debt to small business cash flow issues, debt can feel overwhelming, paralyzing, and never-ending. But here’s the truth: you can take control, even if you feel like you’re starting from zero.
This blog post walks you through a step-by-step plan to help you get out of debt without relying on loans or temporary fixes. These strategies are grounded in real-life financial coaching principles and designed for both individuals and small business owners.
Step 1: Face the Full Financial Picture
The first step to freedom is facing reality with courage and clarity.
Here's how:
- List every debt you owe — credit cards, personal loans, business debts, taxes, etc.
- Write down the balance, interest rate, and minimum payment for each.
- Total it up and compare with your monthly income and expenses.
Use this free resource to organize your numbers:
👉 Debt Tracker Worksheet
Step 2: Stop Adding New Debt
You can’t dig out of a hole while still digging. Here’s how to stop the bleeding:
- Cut non-essential expenses (streaming services, subscriptions, luxury purchases)
- Pause spending on credit — even for business
- Sell unused items or assets to build quick breathing room
- If you're a business owner, reduce operational costs and prioritize essentials only
This step is about protecting your future choices by taking control today.
Step 3: Choose a Debt Payoff Strategy
Once you've stabilized your spending, it's time to attack the debt strategically.
Two proven approaches:
➤ Snowball Method
Pay off the smallest balance first, then roll that payment into the next smallest. This builds confidence and momentum.
➤ Avalanche Method
Focus on the highest interest rate first. This saves the most money over time.
Use tools like Undebt.it to organize your approach and stay on track.
Step 4: Build a Simple, Realistic Budget
To stay out of debt, you need to plan every dollar with intention.
A basic cash flow plan should include:
- Monthly income (fixed + variable)
- Essential expenses (housing, food, utilities)
- Minimum debt payments
- Emergency savings (even $25/month helps)
- A line for “unexpected” — because life happens
Use our free Monthly Budget Template:
👉 https://lionhoodfinancial.com/tools/monthly-budget
Step 5: Create Consistent Habits That Keep You Debt-Free
Getting out of debt is only the beginning. To stay free, you need consistent financial habits:
- Review your budget weekly
- Automate your savings (even if it’s small)
- Say “no” more often than “yes”
- Practice gratitude instead of comparison
- Invest in financial literacy and self-control
Every small, smart decision adds up over time.
For Small Business Owners: Don’t Ignore the Numbers
If you're a small business owner thinking, "my business is drowning in debt", here's what to do now:
- Keep business and personal finances separate
- Track every dollar in and out—daily
- Prioritize profitability over growth
- Reduce inventory, renegotiate contracts, and tighten operations
- Use profit-first budgeting methods
Final Word: Debt Doesn’t Define You
Debt may be your current situation—but it is not your identity. You’re not a failure. You’re someone who’s choosing to face a tough situation with wisdom and courage. That makes you powerful.
Keep taking one step at a time. Budget honestly. Cut ruthlessly. Pay with purpose.
And above all—believe that freedom is worth the fight.