Getting out of debt isn’t as simple as just paying off odd amounts here and there. Depending on how much you owe, you are going to need to think about setting up a plan. What’s more, you’re going to need to realise that plenty of people go through debt. In fact, there are millions of people borrowing money right this second and consumer debt in the US has now exceeded a staggering $16 trillion.
Debt isn’t something you should have to live with hovering overhead, however. There’s good, and there’s bad. In this day and age, it’s healthy to need to ask for help. So let’s take a look at some of the best books on debt recovery.
Best Books On Getting Out Of Debt in 2022
Dave Ramsey – ‘The Total Money Makeover’
Dave Ramsey’s 2009 book has become one of the most useful debt management books available, whether through online bookshops or through lending libraries. Ramsey’s approach to debt management is to-the-point, but it’s overwhelmingly positive. When it comes to breaking free of debt, you’re going to need tough love.
Dave Ramsey’s book is a must read as it makes the most of his counselling experience by sharing with readers step-by-step guides on how to approach money. It’s a best-selling guide for a reason! The Total Money Makeover focuses most of all on how you see money, and how you use it. Ramsey is quick to help you identify myths about debt which will only harm your ability to pay money back long term.
The book also encourages you to get interactive. This means it’s more than just an exercise in empowerment, but is also a workbook for you to leap into action from. Ramsey focuses on showing you how to safely and healthily eschew debt from your life while building a fund for emergencies as well as for later life.
The Total Money Makeover
by Dave Ramsey
- Design a sure-fire plan for paying off all debt—meaning cars, houses, everything
- Recognize the 10 most dangerous money myths (these will kill you)
- Secure a big, fat nest egg for emergencies and retirement!
Jean Chatzky – ‘Money Rules’
Subtitled ‘The Simple Path to Lifelong Security’, Chatzky’s book is a little similar to Ramsey’s in that it is less an empowering read, and is more of a workbook of sorts. It’s a great call to action for anyone who simply doesn’t know quite what to do next in terms of money and in terms of paying off debt. Part of this book’s appeal lies in the fact that it’s written to be used to face almost any financial problem or crisis. For those people looking for a practical handbook to keep on side when finances look lowly, you can rely on Chatzky’s support.
Tips include learning how to cap your borrowing, which is great to bear in mind if you’ve not yet got any debt to your name. Once you do have debt, however, Chatzky knows more than a few tricks which can help to prepare you for later life financial protection. It’s one of the best debt management books out there simply because it’s no-nonsense, and it’s so easy to use in a wide array of contexts.
Money Rules
by Jean Chatzky
- Date your stocks; don’t marry them.
- ‘More money’ won’t always make you ‘more happy.’
- To spend less, carry Benjamins, not Jacksons.
- If you can’t explain it, don’t invest in it.
- ‘Free’ can be very expensive.
James Scurlock – ‘Maxed Out: Hard Times in the Age of Easy Credit’
To be able to get out of debt safely, it does pay to know quite how everything works. Scurlock’s book is, therefore, an extremely interesting read as far as learning about money is concerned. It’s something of a lid-lifter on money practices, which helps elevate it into the pantheon of best books about debt. The best books for getting out of debt don’t just give you ideas, they give you background information and the tools to work with.
Scurlock’s tome exposes plenty about the credit industry which, while widely happening even to this day, isn’t actually all that well-known. The author examines the economy in grave detail, though in a way which is easy to digest. By the end of you reading Maxed Out, you should have a better idea of what credit card and loan companies do to make money, and what you need to do to avoid falling further and further into the spiral.
Maxed Out
by James Scurlock
In this shocking and illuminating road trip through an America ravaged by debt, award-winning film director James Scurlock examines our multitrillion-dollar addiction to easy credit in all of its absurdities and contradictions.
Barbara Stanny – ‘Over Coming Under Earning’
Stanny’s volume is one of the best books for getting out of debt because, like some of the books listed above, it gives you a practical look at how to manage your finances when they’re hardly flowing thick and fast. Stanny takes time to understand how people end up living from month to month, and how you can start making more money through simple exercises.
This book is a little different to the others in this list as it focuses on how to make more cash, as opposed to analysing debt and credit in detail. Even so, it’s a fantastic read for anyone lacking self-empowerment. The best way to get out of debt is to, of course, make more cash to pay it off. This might seem like simple maths, but let’s face it – things are often a bit more complex than that.
Stanny’s book should appeal to anyone who is keen to earn to their full potential, but who may be feeling a bit beaten back by rising debt and money problems. Ultimately, the exercises in this book should help you to break down old cycles and to build new, healthy ones.
Over Coming Under Earning
by Barbara Stanny
When it comes to money, are you controlled by fear?
Do you underestimate your worth?
Are you ready to go to the next level, but can’t seem to get there?
If you answered yes to any of these questions, you may be an underearner.
Jerrold Mundis, ‘How to Get Out of Debt, Stay Out of Debt, and Live Prosperously’
Billed as a catch-all guide on how to escape the clutches of any kind of debt pile-up, Mundis’ volume is fantastic reading for the practical debt-buster. The author has actually based his guide to breaking free from debt on the principles of Debtors Anonymous, the US self-help group which helps millions of Americans each year in taking control of their money.
Mundis’ book is going to be ideal for anyone who wants to take debt recovery one step at a time, and for those who prefer to make plans and to plot out courses of action. For example, the author explores useful negotiation strategy when you need to speak with the taxman, as well as how to harness your own anxiety when debts start piling up.
While this book is clearly aimed at a US audience, I think debtors in other countries could learn a lot from Mundis, as he certainly doesn’t shy away from splitting up the debt-free journey into manageable chunks. The Debtors Anonymous route helps to make things that little bit easier to comprehend – as opposed to dealing with long reams of text.
How to Get Out of Debt, Stay Out of Debt, and Live Prosperously
by Jerrold Mundis
Whether you are currently in debt or fear you’re falling into debt, you are not alone. Based on the proven techniques of the national Debtors Anonymous program, here is the first complete, step-by-step guide to getting out of debt once and for all.
Karen McCall, ‘Financial Recovery’
Subtitled ‘developing a healthy relationship with money’, McCall’s popular book on getting out debt is one which focuses on not only helping you get out of debt, but on making sure you never head back there again. The author understands that debt recovery isn’t something that happens once and never again – it can be a repetitive cycle.
The book helps you to identify where you may have made poor decisions regarding money, and how you can transform your thinking for years to come. It is rather like a journey into the psyche of a debtor – where McCall takes you through each step of your thought process and carefully unpacks it for future education and healing.
This is a book which is all about developing awareness of any financial problems you may be experiencing, and how to avoid falling into the same traps again and again. Think of it as a cognitive therapy book for getting out of debt – it’s marvellously well-devised.
Financial Recovery
by Karen McCall
Financial Recovery will help you develop, and then maintain, full awareness of your spending, earning, and saving activities. It offers strategies for adapting your behavior to meet your most compelling needs, whatever your means.
Richard H Thaler, Cass R Sunstein, ‘Nudge: Improving Decisions About Health, Wealth and Happiness’
Thaler and Sunstein’s book isn’t solely related to money and debt, rather, the authors apply a kind of thinking that lends itself to a variety of different human behaviours. For example, the book looks at every single choice that we make. It’s regarded as a ‘popular science’ book, but its analysis of financial behaviour is well worth reading into.
The research which has gone into Thaler and Sunstein’s book is obvious, particularly as it draws on it constantly. Why do we make some of the choices we do? What influences our thinking the most? Why do we end up in debt – and how can we avoid this in future?
Unlike some of the more practical how-to guides in my list, this book delivers a really enthralling look at why we get into debt – and what we can do to keep out of it. Understanding why we do things is the first step to never doing them again. If you like your self-help books entertaining and eye-opening in equal measure, start here.
Nudge: Improving Decisions About Health, Wealth and Happiness
by Richard H Thaler
Nudge is about choices—how we make them and how we can make better ones. Drawing on decades of research in the fields of behavioral science and economics, authors Richard H. Thaler and Cass R. Sunstein offer a new perspective on preventing the countless mistakes we make
Robert Kiyosaki, ‘Rich Dad Poor Dad’
This book is one of the financial literacy classics. This book isn’t directly about debt reduction, but it is an instrumental book in the journey to personal financial education. The book is written in a very easy to read conversational format and follows the journey of a young Robert as he compares the lives of his actual dad (the so-called “Poor Dad”) with his friend’s dad (the “Rich Dad”). Poor Dad is highly educated but is not financially literate. Rich Dad on the other hand is not highly educated but knows how to maximize his financial outcomes.
The easy reading style of the book helps the reader to stay engaged and absorb as much knowledge as possible without feeling overwhelmed. The differences in how Rich Dad and the Poor Dad approach their lives is eye-opening. Most importantly by really critically explaining the concepts asset versus liability, it will help you in making the right decisions to get out and stay out of debt for the rest of your life! Check out my detailed review of the book.
The best part is that this book also comes with a companion game which helps you to learn the concepts discussed in this book in a practical manner. I personally found the game to be very relevant and useful in my learning journey.
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
by Robert Kiyosaki
Rich Dad Poor Dad…
• Explodes the myth that you need to earn a high income to become rich
• Challenges the belief that your house is an asset
• Shows parents why they can’t rely on the school system to teach their kids
about money
• Defines once and for all an asset and a liability
• Teaches you what to teach your kids about money for their future financial
success
How to Stop Worrying About Money & Debt: 5 Tips
It’s easier said than done not to worry about money and debt. After all, much of our lives revolve around it! To be able to live and enjoy what we do, there’s often a financial demand. However, that doesn’t mean you should be ruled by the readies. If you are wondering how to stop worrying about money then the most important thing to remember is that worrying about money, ultimately, is pointless. Rather than worrying about it, which accomplishes nothing, you need to start taking action.
Stress about money is rife. The vast majority of people aren’t comfortable enough to spend money willy-nilly. Most of us really are in the same boat! In can sometimes be easy to let credit card debts and overdue demands prey on our minds.
Various studies show that up to 20% of us feel that worrying about money has impacted negatively upon our health. In fact, there are millions of people in the same boat as consumer debt in the US has now exceeded a staggering $16 trillion. However we cannot let that affect our health. It’s simply not acceptable – and there are things you can do to break free of such thought spirals.
Remember That Worrying Achieves Nothing
To be able to stop worrying about debt or money, or anything at all for that matter, is to remember that worrying does absolutely nothing. Worrying about having to spend money and your financial situation is not the same as planning ahead. Worrying is self-indulgent, self-destructive and distracts you from being proactive.
Worrying about money is a waste of energy. Why worry when you can take immediate action to plan ahead? Millions of people are still able to live healthy, fulfilling lives while living on very little. What’s more, in the day and age we live in, there has never been so much help available from debt charities.
Worrying about personal finance breeds thanks to uncertain situations. Money worries are largely based around our own perceptions of what might happen. Worrying is a form of prediction. If anything, it’s hedging your bets on a negative outcome. Worrying, more often than not, makes us feel as if we have to do it. That it’s the only way for us to properly prepare for the negative.
This is part of the thought spiral we’re going to start breaking free from.
Take Stock Of The Positives
A great way to stop worrying is to lay everything out flat. Take stock of everything positive in your life. Everything you have to look forward to. All of your possibilities.
Focus on where you are right now, rather than where you may be going. Plan ahead, but appreciate the moment. Save for a rainy day if you can, but actively spend more time appreciating what makes you happy rather than focusing on potential events that will make you sad or stressed.
Worrying about money wastes time. Think about the absolute worst case scenario. Regardless of what that might be, there will always be a way out of it. Surely friends and family could help you – and if not, there will be charities, bodies and more who you could always turn to. But there’s a chance that will never actually happen.
By spending more time worrying about that scenario and less time actively attempting to change it, you’re going to be heading straight towards that worst-case situation. There are no two ways about it!
It’s time to figure out your situation and to start taking action.
Figure Out Your Current Situation
Rather than sitting around wallowing over what may or may not be on the horizon, spend time actively trying to understand your situation.
- Start from the beginning – take note of your regular income, your regular expenses, and what things are looking like for months to come.
- Think about the absolute essentials. Cut out unnecessary or frivolous expenses until you can feasibly afford them again. And don’t worry – that time will come back around.
- Actively think about what you can do to reduce debt. Think about people you could turn to for help. Actively approach the companies you may be in debt to and explain your situation. If you don’t reach out, you’re not going to be able to get hold of any kind of assistance.
- If things look bleak, don’t dwell on it. Think creatively about ways you can get around problems.
- Discuss issues with free advisors. Your local Citizens’ Advice Bureau will be a good place to start. They will be able to put you in touch with local debt charities and will also help you build a budget plan if you need advice.
- Try and stick to a budget. Think about finding cheaper alternatives to the things you need to buy.
Stop Doing The Same Things
Finding a way out of money problems isn’t going to be solved by worrying about them. You’re going to need to stop thinking along the lines of desperation and to start thinking about tangible ways you can attract funds.
- Think about changing your career. Are you being paid enough for what you do? Does your experience or talent demand a higher wage elsewhere? Don’t be afraid to aim higher.
- Think about your possessions. Is there anything you can feasibly sell to drum up extra money?
- Think about taking on a side job where possible – do you have spare time where you could work from home or at a local business?
- Never head straight towards borrowing money. Credit-based finance is only ever recommended if you can afford to pay money back that you borrow. You may find yourself heading down a long rabbit hole if you keep piling credit on top of credit.
- Ask people for help. Why worry about losing pride? If the people in your life genuinely love you and support you, they will be willing to help you find resolutions to your problems. This may not necessarily mean cash advancing, but they may help you find the right avenues.
Change Your Mindset
Learning to stop worrying isn’t always going to be easy. However, it all starts with you. Start taking stock of the positive things in your life, and start looking for tangible ways to save money for the future. Worrying is pointless – taking action means everything. It will take time – and ultimately, worrying is going to waste far too much of it. Stand up and take action!
How to Pay Off Debt When You Have No Money: 6 Tips
This is the exact question I asked myself when I decided to start my journey to financial freedom, how do I pay off debt when I dont have any extra money? It can seem like an impossible task when you are just struggling to meet the minimum repayments. How exactly do you start to pay off debt when you don’t have any money?! If this describes your situation then please read on and follow the initial steps outlined below. I know it can seem like an impossible task but these were my first steps to get myself in a position to start paying down my debt even though I initially thought I didn’t have any money to do so.
Stop using credit cards
This one may sound incredibly obvious but it’s incredible how many people will continue to use there cards even when they are trying to get out of debt. I’ve been guilty of this myself in the past. As difficult as it may be before you can seriously start to pay off debt you need to stop using your credit cards for purchases. Regardless of what the purchase is, even if it’s fuel for your car, you need to find a way to stop the rot otherwise you will never end the debt cycle. If you do have credit card debt, there are legal ways to reduce and write off your debt.
Need Help to Manage Your Credit Card Debt?
You might be surprised to know that there’s a super easy and FREE way to manage your credit card debt. Check out my article on the topic!
Avoid Buy Now, Pay Later Schemes
The ability to buy now and pay later has become increasingly popular in recent years, thanks to the rise of numerous buy now pay later (BNPL) services. On the surface, these services appear to be a great way to manage your finances and make purchases without having to pay upfront. However, there are a few potential dangers to be aware of before signing up for a BNPL service:
- First, it’s important to remember that you will still need to pay off your debt eventually. If you’re not careful, you could find yourself with a large bill that you’re unable to pay.
- Second, BNPL services can sometimes encourage impulsive spending, since you don’t have to think about the cost of your purchase until later. This can lead to financial problems down the road.
- Finally, BNPL companies often charge high interest rates and fees, so it’s important to read the fine print before signing up.
BNPL services were introduced by retailers because it helps them drive increased sales, which means it’s a way of getting you to spend more. The danger of buy now pay later schemes is that they get you to focus on the monthly payment, and not the total item cost. This is always dangerous as it drives your further into debt and delays your ability to get out of debt.
Like other forms of debt, if used responsibly, BNPL services can be a helpful way to manage your finances. However, it’s important to be aware of the potential dangers involved.
Write Down All Your Debts and How Much is Owed on Each
Open an Excel sheet or Google docs sheet and write down each of your individual debts (credit cards, store cards, car loan etc) and how much is owned next to each debt. Make sure this number is accurate to the penny and write down the total. This is your number and what you need to focus all your efforts on reducing to zero.
People tend bury their head in the sand when it comes to debt, but if you are serious about getting out of debt then you MUST know the exact number you are working with. Once you see the severity of the situation it becomes clear that you can no longer hide and the only way to make positive change in your life is to do what it takes to start reducing that number.
Switch Credit Card Debt to a 0% Balance Transfer Card
If you have current credit card debt on one or more cards that is charging you interest each month then you need to look at the best balance transfer cards available to you and switch all or as much debt as you can to a 0% interest balance transfer card. This can give you some much needed breathing space, stop expensive interest charges mounting up each month and really speed up the task of paying down your debt.
Ideally you want to switch to a card with a low or no switch fee and one which has the longest 0% interest free period (a number of cards now offer an impressive 30 months or more interest free on balance transfers!)
Create a Monthly Budget
Another Excel or Google doc based task here. A monthly budget is essential for those serious about sorting out their finances and particularly for those who are looking to get out of debt. Look at all your regular monthly expenses (mortgage, debt payments, subscriptions, gym membership, food and any other outgoings on a monthly basis) and write down each of these individually and the cost alongside them.
Then look at you irregular spending over the last few months and work out a monthly average cost over say 3 months or so. This could be things like eating out, going to the cinema, coffee… essentially every other item you have spent money on aside from the regular monthly expenses mentioned previously.
Next enter all of your monthly income and subtract the expenses from your income. The first time you do this there is every chance you will discover a negative balance. If that is the case then it’s clear that living beyond your means is likely a big factor in you being in debt. The next step is to go through these expenses and be ruthless about what you can cut out. Anything you can live without needs to go. Spending £100+ on cable tv? Yep bye bye. Gym membership you hardly use? That needs to go too (you don’t need a gym to keep fit!).
Do what you can to seriously reduce your spending here. At a minimum you should be spending less than you earn. However what you really need to do is reduce your expenses to a point where you have some surplus funds you can throw at reducing your debt.
Use the Debt Snowball Method
There are a number of methods you can learn about online for reducing debt but so far I have found the debt snowball method (made popular by well known personal finance expert Dave Ramsey) to be the most effective.
In a nutshell with this method you list your debts from smallest to largest, completely ignoring which has the largest interest rate (although hopefully if you have switched your balance to a 0% credit card you wont have any interest) and you attack that smallest debt with every spare penny you can throw at it. While at the same time making sure to keep up your minimum payments on your other debts. Once you have paid off the smallest debt you take what was the minimum payment for that debt PLUS what ever extra amount you were paying towards it and start throwing that at the next debt on the list and so on until you have cleared your debt.
One of the main reasons the snowball method has proven to be so effective is down to behaviour modification. Once you pay off that smallest debt you have a small sense of achievement which really helps to keep you motivated and start attacking the rest of your debt. I highly recommend reading Dave Ramsey’s Total Money Makeover. I read this last month and it really boosted my motivation to start paying off my debt. As well as lots of useful advice it has a ton of success stories from real people who were in a much bigger hole than I am and yet they managed to get out of debt completely within just a few years and in some instances less
There’s No Time Like The Present to Tackle Your Debt
The sooner you start acknowledging your debt and getting a plan in place to pay it off the better. Even if you follow the steps above and only manage to free up a few pounds extra to start paying off your debt it’s better to make a start than continue to ignore it. Believe me it isn’t going away and no one is gong to help if you cant help yourself. If you are struggling to even repay the minimums on your debts and feel you are in serious financial trouble then please seek free professional help. Let me know in the comments below if you decide to follow the steps above and how you get on.
Conclusion
It may seem a bit rich that there are so many debt management books out there. However, the best books on debt recovery are those which are written by genuine experts. Not necessarily people who are qualified to manage finance, but those who have been there and paid debts off. The books in this list are written by authors who genuinely care about beating the debt cycle, and who have found ways to help people rebuild their lives.
Whether it’s analysing expenditure, making more money or simply changing the way you pay debt off, the above books should give you enough bedtime reading to begin with. All debt is different, of course, but it’s handy to have a few ideas and exercises to hand to help you get started.
