A catastrophe can saddle someone with a huge debt. At other times, the process is gradual, with the debt gradually building up because expenses exceeded income and credit cards were used to bridge the difference.

Fortunately, no situation is permanent, and it is possible to climb out of debt. Here are five simple and straightforward ways to pull yourself out of debt:

Step 1: Stop increasing the debt.

Your debt is a result of borrowing money. Sometimes the money is borrowed to pull out of a difficult situation. Unfortunately, it is often just a result of living well above your means and financing a lifestyle that exceeds your income. If you have borrowed money to get out of a difficult situation, then you have to earn extra money to begin to whittle away the amount you owe while still paying for your livelihood. If you are borrowing money to fund your lifestyle, then it is time to cut back, become frugal, and attain a better balance between income and expenditure. When you focus on looking for answers, you’ll find ways to either increase your income or decrease your expenses.

Step 2. Save money for a rainy day. 

While the sun may shine today, the clouds may come tomorrow. If you are earning more than your expenses, then set aside a small percentage each month to build up your savings. It’s true that inflation will eat into the value of what your money can buy, but it is better to set aside some money than use credit cards to recover from an unexpected financial problem. The rate of depreciation of your money is far less than the interest rate that you have to pay to cover the money you put on your credit card. Credit cards should not be used to cover an emergency; instead, emergency funds should be used to do that job.

Step 3. Design a budget, test it for a month, and then refine it. 

Many people don’t set up a budget despite the fact that it will help them get a grip on their finances. They would rather make a quick estimate on whether or not to buy something based on how much money they currently have in their bank account or how much they expect to receive. The problem with this approach is that the money you have available or will have available will also be used to pay for your recurring expenses. Setting up a budget is difficult. It not only requires you to figure out all incoming and outgoing money, but it also has to be tested because not all expenses are predictable. For instance, income may fall if you are self-employed or expenses may rise for variable priced expenses like fuel costs or grocery bills. So, it requires a month of testing to create a realistic budget. A budget will give you a clear idea about whether or not you have a deficit or a surplus at the end of the month.

Step 4. Create a debt repayment plan. 

After you’ve made a list of who you owe, prioritize the list, with the highest amount at the top and the lowest amount at the bottom. You can then decide whether it is easier to work from the top down or from the bottom up. Additionally, enlisting the help of a professional financial service could help you secure enough credit to get a consolidation loan. This means that you can get a loan that is of lower interest than the interest on your debt. By getting rid of the higher interest debt, you can then focus on paying off the consolidated loan.

Step 6. Increase your income and decrease your expenses. 

One reason you may be finding it difficult to reduce your debt is that the money you have coming in has to cover your living expenses. This leaves you with little or no money to take care of debt. One solution is to find ways of earning more money. You may have to work more hours, get a second job, or add one more income stream to your business. Then, to decrease your expenses, review your budget and see if there is something that you are spending that is a luxury, not a necessity. For instance, you may have a subscription to a service that you barely use.

Break Free from the Burden of Debt

Debt creates more than a financial burden. It also creates psychological suffering. By using these five steps, you’ll be able to free up your money for investments as well as free up your mind from constantly worrying about how to make ends meet.