03/19/2014 01:41 pm ET Updated May 19, 2014

How '20-Somethings' Can Get Out of Debt Pronto

If you are in your 20s and in debt it can seem like a gargantuan task to throw that monkey off your back. Do not despair my young friend. It may seem impossible to clear that debt, but it's actually much easier than you think. In fact, there are five steps you can take to turn your debt nightmare into a sweet dream before you know it.

1. Stop Digging

If you want to hit a debt-free home run, you have to get to first base first. You do that when you stop making the problem worse. In other words, you first task is to discover what created your debt problem and put all your energy toward turning that around.

For some people, this means earning more money. For others the solution is to track spending and cut back. Some people find they have to do a little (or a lot) of both. Whatever your circumstances, you are in debt because your income/spending ratio is out of whack. It's as simple as that.

You may have acquired that debt as a result of bad spending habits you've since corrected or some major event (such as student loans). If the cause of the problem is in the past you are one step ahead of the game. That's great. But the bottom line is that you shouldn't do anything until you understand exactly why you are in debt and what you have to do to stop creating more.

2. Refinance

Once you've stopped your financial ship from taking on more water, it's time to bail out that debt. Make a list of all your debt and include the amount, the payments you are making and the interest rate.

Keep in mind that when you make your payments, most of the money goes towards interest and the remainder towards the principal debt. You create magic when you reduce the interest rate on your debt. That's because more of your payment will go towards reducing the principal and that means you'll be debt free much faster.

Refinancing debt is a process. First, try to get your lenders to reduce the rate they are charging you. That may not be too successful, but it's worth a try. If one lender won't budge, you may be able to roll your credit card debt (for example) to another vendor.

Once you've done all you can in that department, try to get your family to refinance your debt. If you decide to approach your kin make sure you have a rock-solid payment plan and show them what it is. Then, you need to stick to that plan to the letter. The last thing you want to do is burn those family bridges.

Last, there is always the idea of peer-to-peer funding to reduce your interest costs. If you are stuck with a very high interest charge for credit card debt you may be able to roll that debt over to a private lender and reduce your rate big time. That can add up to some juicy savings too.

3. Do the Math

At this point you've done all you can to slash your cost of debt. Notice, all this work hasn't cost you a dollar or involved any work. You've simply rearranged your debt to make it more manageable.

Now it's time to roll up your sleeves and slay that debt dragon. My suggestion is to make minimum payments on all your debts except the one with the highest interest rate. Use every penny you can spare to wipe that highest cost debt off the map. This way you'll get rid of your most expensive problem first. Once the highest cost debt is gone, apply every penny you can towards the next highest cost debt. Continue this process until you are completely debt free.

This isn't easy, but it is simple. It requires time, focus and action. But if you use this process and make it a priority in your life you'll be out of debt much faster than you would otherwise. Once you take care of the debt, you can turn your attention to the future. My experience is that people in their 20's have many unique opportunities to really accelerate their financial success once they get out of debt.

What other steps do you recommend in order to get out of debt?

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