Get out of debt in 2021: make these your New Year’s resolutions

Get out of debt in 2021: make these your New Year’s resolutions
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It’s that time of the year when people start trying to turn over a new leaf. Whether you’ve resolved to get out of debt this year or not, it’s always a good time to start chipping away at it. Here are several things you can start doing in 2021 to get out of debt.

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Get out of debt: start with a list


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The first thing you should do to get ready to get out of debt is to make a list of everything you owe. List the amount of the debt, the creditor, the amount of the payment and the interest rate. This will enable you to see how much you owe and make a plan for which ones to pay off first.


You should pay the debts with the highest interest rates off first. You should also pay credit card debt and any other bad debt you have before good debt like a mortgage or even a car payment. Good debt is anything that you have a reasonable expectation of lasting benefits for. In contrast, bad debt is anything that doesn’t have lasting value or that outpaces your ability to keep up with the payments.


If you have multiple credit cards with high interest rates (compared to the rates on your other debt), then you might want to start with the smallest amounts first. It’s a good idea to concentrate your payments on one debt until you pay it off and then move on to the next one. Paying off smaller debts first will give you a sense of accomplishment and keep you motivated on your goal of getting out of debt.


Look for money to put toward your outstanding balances


After you have your list ready, it’s time to start thinking about how you ended up in debt in the first place. In some cases, it’s as simple as spending more than you make, but in others, emergencies happened, and you didn’t have enough money to pay for them as they came up. Thinking about how you ended up in debt will enable you to come up with solutions that will allow you to get out of it and keep from getting underwater again.


This is also an excellent time to start looking at what you spend and trying to find places to cut back, so you have more money to pay off loans and credit cards. Go through your monthly bills and look for savings. Call your internet service and mobile phone providers to look for better deals. Anything you can save and put toward those loans and credit cards will help you achieve your goal this year.


After you’ve cut your monthly bills, start looking at other things you spend money on. Some savings will be obvious, like expensive cups of coffee every day. You might even think about investing in a nice coffee maker to help you resist the urge of visiting the coffee shop every day. You can also save money by not eating out as often and buying less expensive groceries if possible.


Reward yourself for progress in getting out of debt


When it comes to any resolution, one of the hardest things is to stay motivated. To ensure that you continue to make progress, reward yourself at major milestones along the way. This could be every $100 or more. Just be sure not to go overboard with the rewards. You don’t want to incur more debt by celebrating your progress in paying it off.

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Michelle Jones is editor-in-chief for and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at
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