6 Steps to Eliminate Debt and Achieve Financial Freedom


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In Dave Ramsey’s Financial Peace University, he describes two types of people as it relates to money – the nerd and the free spirit. If you are married, you have to determine which one you are and which one your spouse is so you can understand each other’s money habits. The nerd is the person who counts every penny. You practically have to pry money out of their hands. On the other hand, the free spirit allows money to literally flow freely out of their hands. Both of these personalities need each other. The nerd needs the free spirit to help them loosen up while the free spirit needs the nerd to help them with discipline.

Life has a way of tripping us up with obstacles. Some of these obstacles we create but others are brought on us. We all want to have enough money to live comfortably, provide for our families and save for the future. However, circumstances present themselves and we find ourselves in a position where it seems like we just can’t get out of the hole.

But there is always hope! No matter how deep you think you are in, you need to assess your situation and pick an action plan to get out of debt. Here are some personal debt reduction tips that my husband and I live by and you should too if you want to begin the journey to financial freedom:

1. Acknowledge the situation and stop dwelling on it

When we are going through a difficult time, it is often easier talking about it than moving on from it. After I had Caleb, I found out that I wouldn’t get my short-term disability. This meant that I wouldn’t get paid for another 6-8 weeks. I didn’t get a check from mid-May until mid-July. It was devastating because we are a two salary household. We needed every dime. This situation set us back financially and we went another year trying to get back on track.

The following April, we decided to get a financial planner to help us with our finances. She helped us take a hard look at where we were spending our money. It was hard. Nate and I were both in tears. But we didn’t stay there…we acknowledge where we were and decided we needed to get on a different course.

2. Stop putting yourself into further debt

Getting out of debt means stop acquiring debt. Cut up those credit cards! Whatever you think you need can wait. It is time to stop making a bigger financial hole, and time to start building a solid foundation. If you have children, this is even more important. They need to see you using your resources appropriately. Children will emulate what they see in us and we want to set the best example for our son.

3. Evaluate your current situation

Having a budget can be the most annoying yet most rewarding thing you can do for your family. We have to discipline ourselves to even do the budget. There are times when I don’t want to do it but I have to push through. Once it’s done, I feel a sense of relief and peace.  Our budget is brutally honest. The numbers don’t lie. Either we can purchase it or we can’t and we know if we purchase something that is not on the budget, there will be consequences.  

4. Stop stressing, prioritize and get to work

When we started doing the budget, Nate and I would disagree about some things. Who should get paid and when. Over a short time, we established goals for our family and a common ground where we could do the budget knowing we are taking care of the items we need to while saving for the items we desired.

When you are trying to reduce debt, there can be so much stress and tension in the household. We didn’t want our son to feel this stress; however, we want Caleb to understand the importance of being a good steward over his money. We decided to come to budget meetings with a open mind and just relax. This shouldn’t be a stressful time. We realized that not doing a budget and not knowing where our money was going is more dangerous than getting our priorities in order.

5. Get your spending under control and give every dollar a name

Everytime we want to purchase something, I always ask, “Is it in the budget?” I am serious about our family showing some financial responsibility. One of the things we try not to do is become so serious about the budget that we have no fun. We want to enjoy life but we always want to make sure we are not spending money and not holding ourselves accountable. This is the only way to get out of debt. You have to give every dollar a name even if it was $0.50 in the vending machine. If it’s $10/day on lunch, that’s AT LEAST $300!! You basically ate your phone, cable, or electricity bill.

6. Don’t get distracted! Attack it!

Once you have given every dollar a name, you can attack the debt head on. We do our budget in an Excel spreadsheet so we create sheets with the budget for different item – debt, short term goals, long term goals. We go down the list and pay everyone. We even pay ourselves for our short term and long term goals. We take this seriously and you should too. When an unexpected item knocks us back, we record the hit and figure out what it will take to get back on track and do it. It may shift some goals but we know exactly where we stand.

I love hearing story of financial breakthroughs and miracles. Share your story with us below. Our testimonies help others overcome life’s challenges and hard times.

Kesha Holloway

The author Kesha Holloway

Kesha Holloway is the founder of Living in Your Sweet Spot. She is passionate about being a wife and mother and desires to align herself with women equally passionate about their families. She believes the woman is the backbone of the family unit and it's her mission to help lift women to achieve their purpose.


  1. Nicely explained, for me the best way to get out of debt and stay out of debt is to avoid increasing your debt. Clear all your existing debt with every pay check, and make sure you don’t fall into its trap again.

    1. Amen! As Dave Ramsey says, “With gazzelle intensity!” You have to knock down debt with every extra dollar and never get back into the situation again.

  2. I’ce heard of Dave Ramsey’s Financial Peace University before. I really want to check it out. My husband and I got rid of all debt (minus our house) just before we married. We dont have a newest house, electronics, cars .. but what we do have is 100% ours. And that is really such a n amazing feeling. My friend got a new car at it costs $800/month for 7 years. I couldn’t imagine!

    1. That’s awesome Alaina! I can’t imagine paying $800 a month for a car. Wow! My husband and I see those commercials for new cars and one said the payment would be over $700/mo. I think it was for the Cadillac Escalade. It literally took our breathe away. I would rather have the entire amount to pay for the car in cash or not have it at all. So happy for your and your husband. We are still trying to get there but we are determine to do so!

    1. Yes! We have had to do this because if we didn’t give the dollar a name, it would mysteriously be missing. 😉 We kept track of even little items like going to the vending machine.

  3. A penny saved is a penny earned is my philosophy…i track my expenses regularly to keep a check on unnecessary purchases! Great tips..

  4. These are some great tips, I love the first one. I always understand a situation when it is there but then I dwell on it and it makes me anxious. We both know that doesn’t help a situation. Thank you for sharing this! I’m going to have to try these tips!

  5. These are extremely helpful tips. Although, I only have my student debt, I do not want any other debt so I will try to avoid it.

  6. Love these tips – it’s a great way to kick off the new year. Besides health/fitness, money and finances are a big area to make just some improvement on. I really could budget my Target expenses a bit better – Haha!

  7. I’m not familiar with this problem of debt, as I’ve studied my grades in Argentina where University is free of charge. I have also studied my post-grades in Switzerland where there are some payments, but it is really nothing comparing to the US. For my Master’s degree I payed something like 2’000 USD per year. I was working at the time, and that represented less than the half of one month salary. In any case, this advice is very pertinent!!

    1. Nati, that’s awesome! Unfortunately, it’s not the same story for most Americans especially those of us with student loan debt from undergrad and postgrad education.

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