It is not uncommon for people to be saddled with student loan debt or consumer debt. With debt come stress and a reduction in financial freedom, yet many people find it challenging to get out of debt. Making debt payments sometimes seems like a neverending cycle and often leads to frustration rather than a sound financial plan. However, the quicker a person can get out of debt the better, due to the negative effects of compounding interest. The following are five tips for buckling down and getting out from under debt.

1. Make a Payment Plan

To get out of debt, especially if your budget is tight, it is imperative to have a payment plan in place. A plan gives you direction and an end date for paying off your debt. To start, list every type of loan from the smallest principal to the largest principal. Make minimum payments on each one of the loans, and decide on the maximum amount possible to pay on the smallest loan per month. Continue to make payments on each loan until all debt is paid off.

It is important to start by paying off the loan with the smallest principal, because as each loan is paid off, a larger monthly amount can be applied to the next smallest loan, allowing for a quicker payoff with a smaller amount of accrued interest. This is known as the debt snowball, which was pioneered by finance guru Dave Ramsey.

2. Set Up Automatic Payments

When people have a lot of debt to their name, it is easy to make excuses for not making monthly payments. In fact, if someone is on a limited budget and has a high amount of debt, small monthly payments may seem futile.

However, do not forget about compounding interest. Even the smallest payment possible helps to reduce the total amount paid over the life of a loan. To mitigate excuses and ensure monthly payments are made to pay off debt, set up automatic payments with a bank or through the actual lender. Make sure these automatic payments are factored into your budget, so they do not become monthly surprises.

3. Cut Costs and Reduce Expenses

Regardless of a person's money situation or debt level, this is a tip everyone should follow. Think about it this way: every dollar in expenses that can be reduced signifies an extra dollar put toward a debt payment. If the interest on a loan is 5%, for example, each additional dollar put toward a monthly debt payment results in a savings of 5 cents.

While that might not seem like a ton of savings initially, it works to reverse the effects of compounding interest, saving a lot of money over the long-term. Cutting costs may be a hard practice at first, but there are a lot of expenses that are not necessary. Buckle down now, and it may be possible to increase spending on these discretionary expenses in the long-term.

4. Change Spending Habits

This is not the same as cost cutting or expense reduction. If the debt is consumer debt, it was probably taken on due to frivolous spending habits. Running up credit cards and purchasing unneeded assets is a great way to stay in debt. Rather than continuing to overspend, change your spending habits. That way, additional debt is not added to the total outstanding amount.

5. Get Help From Professionals

Debt repayment can be an overwhelming task. If you do not know where to start, it is possible to get help from a credit counselor from an agency such as the National Foundation for Credit Counseling. If you have a lot of different outstanding loans, consider consolidating the debts into one debt payment. Only do this, however, if the overall interest rate of the consolidated debt is more favorable than the various interest rates on the original outstanding loans.

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