How to climb out of a financial hole

climbing out of financial hole
In this consumer driver landscape, it is one of the easiest times to get into consumer debt. Many people are even of the notion that having credit cards is like having free money. This leads to a lack of control and they end up overspending. Credit cards in and of themselves are not bad. They are just tools but they are tools with which you can dig yourself into mountains of debt.
Credit cards have some of the highest interest rates in the world. This makes it so easy to get yourself into a financial hole. They can also be a great tool that you can use to develop wealth in the 21st century. This double-bladed nature of credit cards means that the onus falls on us as individuals to exercise self-control when using them.
Being in a financial hole straight-up sucks. The level of anxiety and stress is not healthy for your mind and body. I read a recent story about this 33-year-old man who was in $US 400,000 dollars in debt yet he was earning $US 95,000 and was working 4 jobs. That is not how humans are supposed to live.
Being in massive debt has other effects; such as eroding your self-esteem and self-worth. It can even lead to depression it is like being in an invisible prison of your own making.
Being in a financial hole also delays some important opportunities for you such as owning a home or starting a family. It is like a stone around your ankle while you are trying to swim it will drag you down into its depths.
The best advice to give about a financial hole is to avoid it all together. But, if you are already in a financial hole here are some tips on how to climb out of it.

Cut out all necessary spending

The best way to get out of a financial hole is to stop digging. You can do this by cutting out all unnecessary spending. We all have things that we end up buying monthly that we don’t need. You might even find yourself doing impulse buys on amazon. Keep track of all the things you buy in a month and you will find that you don’t need some of these things. That extra cash can be used to help you begin to pay off your debts.
You have to curb your habit of spending. Your financial health depends on it. If you use a credit or debit card you can download your monthly statements and examine them. Make sure you download at least 3 consecutive monthly statements. With this method, you can see what your spending habits are. If you find yourself eating out too frequently, the statements will help you pinpoint where exactly you need to cut.

Make a list of all your liabilities

Financial liabilities in the rawest sense are anything that takes money out of your pocket. For example, you may like your car but how much money does it take out of your pocket monthly? You have to pay monthly to keep your car if you had it financed, you have to pay for maintenance,  you have to pay for gas. A car can be a very taxing liability on your wallet especially if you are not financially stable.
Now I am not saying to get rid of your car because although it is a financial liability it is also an asset that you use to travel to work every day. Always look at your liabilities to see if there is any way you can reduce them. you could get a smaller car for example. You would still have something to take you to work and to travel but you could lower your monthly payments. You may even spend less on maintenance and gas.
Liabilities hold us back from achieving our financial goals. You would be surprised at how many people who earn a decent salary end up working paycheck to paycheck. all because they do not have control of their liabilities. At the same time, you might find someone who is earning much less but who has way fewer liabilities and is better financially. This is because he has invested in assets that bring him a monthly dividend or some other form of recurring income. Take note of all your liabilities if you would like to stop the financial bleeding.

Cancel your credit cards

If you find that you have a lack of control when using your credit card you should cancel it. Credit cards are financial tools, but every tool is only as good as its user. Most people who have a credit card today abuse it, they think of it in the form of free money. The problem happens when those swipes become due and payable.
Credit cards have some of the most outlandish interest rates out there and especially if you have not read the fine print. Some people manage to scrape by, paying the minimum amount on their credit cards every month. If this is you,  cancel your credit card as soon as possible until you can dig yourself out of the hole.
Credit card debt is a huge issue in the United States, as americans are now over a trillion dollars in credit card debt. Spending money that you don’t have is a recipe for disaster. Some people may think that credit cards are the problem but it is really your spending habits that put you in a pickle.
If you follow the rules of the credit card you can experience benefits. However, if you are already in the hole the best thing for you to do is give up the card in the short term until you can get your spending under control. You could argue that you could use your credit card to buy assets that could help you get out of that hole. But if you know yourself and you know that you would most likely be using the credit card on impulse buys or liabilities just get rid of it. Your habits are what got you in that financial hole it is your habits that will get you out you have to change your habits.

Consider debt consolidation

If you have multiple loans paying at any one time it could be a smart idea to consider debt consolidation. Pooling the loans together under one umbrella with a lower interest rate could help you pay it off faster. It is easier to focus on paying one loan than having five different loans all due at different times in the same month. It is easy to miss a payment if your loans are set up like that.
Consolidate your loans then focus like a laser on paying them off in the shortest time possible.

Make some extra cash

Do you have some clothes, shoes, or anything lying around the house that you don’t need? Well, you could sell these items to get some extra cash to pay off your debt. You could have a yard sale or even sell them on eBay. Everybody has some items in their house that they no longer need or use. You would be surprised at how much money you can make by selling off some of those things you don’t need.
Another way to make some extra cash is to start a side hustle. Nothing time intensive like a full-fledged business. Something like selling t-shirts online, Kindle book publishing, or affiliate marketing. It depends on how much time you have to spare and how fast you want to get out of debt. These are like set it and forget it, you would have to check your accounts to see if you are making sales and adjusting accordingly.
The benefit of doing something like selling t-shirts or Kindle books online is that the platform will do the selling for you. You may need to do a little advertising. Once you place your product on these platforms and optimize your listings. You could use the rest of your time to focus on more ways of getting out of debt.

Develop good money habits

All the above tips and tricks are good when trying to get out of a financial hole. But you have to handle the root cause of why you got into debt in the first place. This is so you don’t end up in the same predicament five or ten years down the line. Habits drive everything we do in life we can’t avoid them but we can replace them. We can replace bad habits with good ones.
Start a habit of investing a percentage of your salary every month. You could invest in a dividend-producing stock that pays you every year. In short, you should invest in income-producing assets and reduce your liabilities. Download your monthly financial statements and it will show you your financial habits. Use it as a tool to prune the habits that do not serve you and those that will lead you out of the hole you are in. We all spend on things we don’t need but it is important to know where the bleeding is so we can stop it.


The one saving grace of being in a financial hole and getting out of it is that it teaches you a powerful lesson. The harder it is the climb out the stronger the lesson. You will find yourself thinking twice before you overspend, borrow or get yourself into any exorbitant debt.
Debt is a thief. It is a thief of the one thing that is most important to us in life and that thing is time. You will spend your time trying to get out of debt. But by the time you are finished could find yourself in your fifties and sixties looking back at your life and asking where did the time go. So if there is anything to learn from digging yourself out of a hole it’s that you have to guard your time because it is your most precious asset.
Have you ever been in a financial hole? if so share some tips on how you managed to climb out of that hole below.

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