4 time-tested tips to help you get out of debt in 2017

Getting out of debt is easy provided you acknowledge the problem and take responsibility for it. In fact, it can serve as a blessing in disguise for couples to help them make certain long term lifestyle changes and take more control over their financial well-being.


"Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this."

- Dave Ramsey

Shruti and Pankaj are a young couple who were married just a year ago. They continued their high consumption lifestyle even after marriage, partly for instant gratification and partly to show off. They soon realised the mess they had created and were saddled with a big heap of loans. As they are planning to start a family in the near future, they are keen to get out of debt as early as possible.

The consumption boom and the online deal-and-discount culture has left many young families neck deep in debt in the early years of their financial life. Though this may seem like a scary situation, it is only if one does not wake up in time & take proper steps to resolve it. In this article, let us touch upon some proven tips to help you start off 2017 on a strong note and get out of debt.

Tip #1: As a couple, jointly acknowledge & take responsibility of the problem

As was portrayed so beautifully in the Bollywood movie Ta Ra Rum Pum, often the biggest reason families end up debt laden and financially unstable is that both partners do not discuss money matters. Moreover, both see money from a completely different lens. As a result, there is no unified approach to saving, investing & financial planning and when things go wrong, a blame game starts which, in some cases, also ends in a messy divorce. So, first thing is that the couple should sit together and acknowledge the problem. Then, they should agree to do everything to resolve it in a harmonious way. And if this is done, half the battle is won.

Tip #2: Get a grip on your monthly cash flow pattern

A common feature of such families & a big reason for the mess is that they did not monitor where they were spending money or how they were saving it. As a result, money gets borrowed, instead of planning in advance and reducing expenses. So, from today, pick up a diary and start writing down your daily expenses. It will build a lot of awareness on the spending habits and help you find out how much is left after you have accounted for your expenses. This will help in learning how much you can allocate every month towards loan repayment and helps gets a realistic idea of how long it’ll take to close all loans.

Related: 10 Small Hacks to Save Big Money

Tip #3: Prepare a debt inventory, allocate closure priorities & repay aggressively

Not all loans are bad. For example, home and educational loans can be classified to be “good loans” as they carry a low interest rate and the fact that they come with certain tax benefits. Conversely, loans like credit card outstanding, personal and vehicle loans can be classified as “bad loans”, cost a little more.  

So, first open an excel sheet & make an inventory of all your loans that you have as a couple as on date. Add a column and set closure priority (prioritise bad loans over good loans). Now, based on how much you can aggressively save & repay, set target closure dates against each of your loans. This sheet should serve as a reference point for your progress. Every month, set a reminder to revisit this sheet to know whether you are on track or not.

If you’re playing a game, play it hard! Start living frugally & whatever your additional savings are, use them aggressively to repay your loans. Scan your bank accounts for idle cash or fixed deposits & use those to close these debts. Got your annual bonus or any windfall gains or inheritance, apply to it.

Related: Have an outstanding home loan amount? Life insurance can help you repay it.

Tip #4: Stay motivated in the journey

Add some fun & drama to the exercise: Designate a day, say December 31, 2016 as your debt free day. Write it down in big words and paste it in your room, or wherever you’re able to see it. Associate this goal with memories of happiness and relief of being debt free. Designate an accountability buddy – a close friend or office colleague who has the right to “demand” from you a status of your progress on a periodic basis. Alternatively, engage a Certified Financial Planner professional who can create a customised debt repayment plan for you. Do anything to stay motivated and on course.


If you want to make a lasting change & ensure you don’t fall in the debt trap ever again, start making changes in your lifestyle right now. Financial security isn’t far away, as long as you live within your means and do not rely on the crutches of debt to fund your life’s dreams.

As for Shruti and Pankaj, this wake up call to get out of debt should serve as a blessing in disguise that can propel them towards greater financial awareness and responsibility.


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