Debt to some of us is a tool to be used to help improve our financial situation or a temptation to get more than we should be allowed to. Some see it as an insidious monster lurking around the corner, waiting for you to slip and make a mistake. Some see it as something they never want to touch. But the reality is that, a debt can land you into some serious financial pit falls.

Today we’re not going to talk about any of that stuff. Today I want to share with you seven ways to get out of serious debt and make sure you never fall back into it in the future.

1. Determine the gravity of the debt

Most families don’t realize the extent of their debt burden. Money might be tight but many believe that they are doing okey if they manage to make their minimum payments. Unfortunately even a minor financial setback could push you into a serious financial hole virtually overnight.

To determine your debt burden, add up all your monthly consumer debt obligations and minimum required payments, this may also include all your loans. If the total consumes 15 to 20 percent or more of your paycheck, then you might be headed into some serious financial crisis and there’s need to take some serious measures to reduce your debt. Also look for those signs of a high debt burden such as borrowing to pay for necessities, missing payments or making late payments.

2. Stop Spending
After realizing and fully accepting that your finances are in turmoil, stop spending, and take a breather for a while. One of the first steps is to stop digging the hole any deeper. Limit your spending to the bare necessities, such as food, shelter, utilities, transportation and the likes. Postpone buying new gadgets or taking vacations, eat at home for a while and please don’t get tempted to buy anything on installment.

3. Determine why you’re in debt
If you don’t understand why you landed into debt in the first place, chances are you are less likely to take the right steps to get out, and stay out.

For instance, you might have held your debt load to an acceptable level until you suddenly lost your job, or experience a serious financial crisis such as high medical expenses. This suggests that once you get out of debt you need to build a large cash emergency fund.

On the other hand, your debt situation might have been brought about by unrestrained spending, poor use of credit facilities, lack of budgeting, gambling or not paying proper attention to the management of your money. In order to settle your debts and avoid incurring more in the future, you’ll be forced to break these habits.

4. Budget
Everyone should have a budget or spending plan. Not having one is a major reason as to why people get into debt. A spending plan basically entails accurately tracking all of your expenses and making sure they don’t exceed your income.

In case of excessive debt, look for ways to trim some of the less critical expenditures, such as lunch out every day, in order to free up extra costs to put into decreasing your debt.

5. Generate new income
Take a second job, have other family members take jobs, even on a part time basis and direct the money to paying debt.

Sell off expendable personal assets for cash.

6. Choose a method to pay off debt.
One of these two approaches is recommended.

You can pay the minimum on all your smaller loans and debts, and direct any extra money towards the high-interest loan. This method enables you to save some money in the long run since you'll mainly focus on settling the major debts which usually attract higher rates.
The second method entails earmarking any extra money towards the smallest debt first and pay it off as soon as possible, this will give you some sense of self accomplishment. Once it is paid off you can go to the next smallest debt and so forth. This method is more psychological rewarding than the first, though it will save you less money in the long run.

7. Talk to your creditors
If you find yourself unable to make the minimum payments on your loans, talk to your creditors. They may be willing to temporarily suspend payments, let you repay your debt in small installments or negotiate loan terms. They would rather receive some money from you than nothing at all.