How To Get Out Of $10 000 In Debt In Just 5 years

If you are reading this and you are in debt , remember :

1.You are not alone

2.You have nothing to be ashamed of

3.You can do this

Debt is the acid that eats away wealth and is the Number 1 reason why many high-income earners never reach true wealth.

But in a modern consumerist economy like ours , debt is easy to get into because consumer debt fuels economy.

Consumer debt enables people to buy things and experiences that they would have otherwise not been able to afford.

Personal loans, credit card loans and easy EMI’s make it very simple for us to buy stuff we cannot afford with the money we have in the present.

This is good for the economy, because it encourages consumption and production.

Bu what is good for the economy is not necessarily good for you.

Consumer debt is the reason people do not have enough to save and invest for their future.

This leads to even high income earners having low levels of wealth.

Stop living above your means


Delayed gratification and wealth go hand in hand.

According to a survey done by more than 2 out of 3 U.S. adults (68 percent) don’t know when, or if, they will ever be debt-free.

It is very easy to get in debt but sometimes it is very difficult to get out of it

It can take just a few months to create tens of thousands of dollars in debt, but sometimes decades to pay it off.

How can you get out of debt will depend on YOUR situation.

Until you fully commit to getting out and staying out of debt, you will never “get out of debt”

This is because, in my opinion, debt is a mindset.

Choosing to get gratification now, and then pay for it later is a frame of mind.

Spending on credit justifies this.

Go on vacation and work later to pay it off rather than delay gratification rather than choosing to work on yourself, your business or your goals is a broken (in my opinion) frame of mind and not just only  a money problem.

Everyone who pays off their debt does it a different way and very often combine strategies to knock out bad debt.

Choose which one from below which is easier for you.

1.Understand your debt

Have a good understanding how much you have to pay off including all interests and other fees.

Once you understand it compare it to your income and plan it how much you can realistically pay off every months.

For example:

If you owe $20 000 and you earn $2000 per month it is obvious that you cannot pay the debt off in a month and the interest will start compounding.

However if you can save $300 per month you will pay your debt in around 5 and half year assuming your debt is not increasing and there is no extra interest.

It is not usually the case as the interest will add every month which will put you in trouble.

Assuming you have $20 000 to pay off and only $2000 of income with the possibility of paying $300 per month you can still do something.

You regular credit card interest is around 20%+ and it is adding up every months so you need to come out of this crazy trap and find an alternative solution

2.Use Existing Techniques

Make a list of all debts and prioritise which ones to pay off first.

Here is an example


Debt Interest
Car Payment
Credit Card
Student Loan


Debt Interest


Name of debt:
Opening Balance


Avalanche technique.

It is best for people who can stick with long term goals even without immediate results

To pay your debts off as quickly as possible, start by paying off the debt with the highest interest rate first.

Continue to pay off your debts, working your way down from the highest interest rates to the lowest.

Snowball technique.

This is the best for people who need immediate results to feel motivated

With this method, you pay off your smallest debt first and work your way up.

This is not always the most efficient way to pay off your debts in terms of saving money, but the sense of accomplishment that comes with successfully paying off a debt, even a small one, can help motivate you to keep at it.

To remove the temptation, “retire” of some of your credit cards as you pay them off.

Too much credit can be a bad thing.

Closing credit accounts can have a negative effect on your credit score; a better solution is to pay off excess cards and stop using them without closing the account.

Cut up the card so you won’t be tempted to use it.

3. Refinance your debts or take a loan from the bank

They are usually on much lower interest and you should easily find something around 7–10%. this means that it will cost you around $1800 extra every year and you will need more years to pay it off.

The good side is that the debt will not grow any more.

Loan from the bank on lower interest such as 5%.

There is plenty of them currently so if you have reasonable credit you should be OK to apply.

This will still cost you and you will need around 8 years to pay it off but it will be the clean way out of the debt.

If you have some extra money you can pay off more and quicker.

The good news you will start getting control over your finances.

If you do refinance , do it for no points and a lower rate.


4.Build an emergency fund

An emergency fund may sound counterintuitive if you’re trying to get out of debt since you could be using that money to pay off your debt instead of sticking it in a savings account.

But, an emergency fund can actually keep you from creating more debt by providing you with a safety net you can use instead of a credit card when an emergency comes up.

The ideal emergency fund is six to twelve months of living expenses, but focus on building up at least $1,000 in the short-term.

5.Contact the lender if you cannot make payments on time

if you experience a job loss or other misfortune , contact your lenders right away. The worst thing you can do is ignore them.

Explain your financial situation and agree on a new payment schedule that you can manage.

Get the agreement in writing and ask them to include a note that your payments will not be reported as late