Your First Step to Debt Recovery


After finally dealing with your debt issues, one of the first steps to recover from debt is to take a step back and see how you got there in the first place.   Yes, it was an expensive lesson, but what doesn’t kill us only makes us stronger right?

The bottom line is that your debt didn’t accumulate overnight, it was a combination of: lack of savings, uncontrolled spending, failure to budget, or even  unforeseen  expenses.   Whatever the case is, the first step is to figure out how you ended up in debt in the first place.

I personally don’t think you should be too hard on yourself.   After all, getting out of debt is MUCH harder than getting INTO debt.   So by taking the steps to get out of debt, that in itself is a huge accomplishment.   I’ve been in debt myself, so it’s safe to say that most people have been there before.

This is actually a perfect starting point.   You’re debt free, back to zero, and you have another chance to use credit responsibly.  

One of the biggest things you can do to prevent credit card debt is to limit the credit limit of each card you have.   Some might say to not carry cards, but we all know that we need credit cards for several reasons:   booking a car, travel, and especially rebuilding your credit score.

I usually recommend starting off with a secured credit card.   Not only is it an excellent way to rebuild your credit, but you’ll have the urgency to pay it off every month because you deposited cash to establish your credit line.   Recovering from debt should be a slow and steady process. You don’t want to jump on every credit card offer you get in the mail.   In all actuality, you’re an ideal candidate for credit card companies to target because they know that it’s tough to change your financial behavior.   This is the time where you prove them wrong!

Next, start a monthly budget.   It might seem like a boring task to do every month, but this is the basic foundation of controlling your spending.   Don’t try to construct a strict monthly budget; this will only discourage you from keeping on track.   Instead, set aside some money towards entertainment.   Break up your monthly budget into weekly budgets, and celebrate the small victories every week for keeping on track.

Lastly but not least, it’s important to start your emergency savings fund.   Most people get into debt due to unforeseen expenses, such as medical bills or an auto breakdown.   This is exactly what your emergency savings fund is set aside for.   If you establish your savings fund, there’s no need to use your credit card for these purposes right?

If you’re able to have a positive attitude and become optimistic about your financial future, this will only encourage you to become more financially responsible.   Your recovery from debt should be a steady process.   Learn to budget, control your spending, and start an emergency savings fund.


3 Responses

  1. Ajay Dubey

    May 12, 2012 2:08 am

    You are right debt doesn’t accumulate over-night. Debt is the outcome of your careless spending and splurging of money on unessential goods and other luxuries.
    First of all analyze your manner of expenditure. Make your monthly budget and do not include those things which are not very essential. Don’t use your credit card unless or until there is any emergency.

  2. John (Vikas Sharma)

    May 12, 2012 3:31 am

    Not carrying a credit card is not a solution rather using the credit card wisely is the best solution. Remember credit card is a facility provided to you which you should use only in case of emergency.
    Monthly expenditure can be controlled only by making monthly budget.
    One good practice is to note down your daily expenditure. Make a notebook or diary and pen down your daily expenditure in it. this will help you know on which things you spend most and help you control your budget.

  3. High Risk Merchant Account

    May 29, 2012 11:15 pm

    Great tips Kevin. It’s just so unfortunate that our experience on debts became our teachers. Life would have been easier if we learned from others’ experiences. It saddens me even more to know that there are only 15 states teaching finance related courses in high school which means there are a lot of individuals who would need to recover from debts in the future.

    I hope they stumble to this post or related posts online.

    Best regards,


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