Being in debt is very much like being in a thick fog; you know there has to be a way out, but you just cannot see it. Rest assured, there always IS a way out, and by simply taking hold of your financial situation and liabilities, you can start to find your way out.

1. Make a Budget
Before you can reduce your spending and reduce your debt, you need to figure out where your money is going. Make a complete and concise budget detailing not only ALL of your monthly bills, but additional expenses as well. Be sure to include things like your monthly gasoline budget, groceries, entertainment expenses, and any other odds and ends. The best thing to do is be completely honest with yourself, even if you do not want to. Once your budget is made, you need to prioritize it, taking into account due dates and amounts. For help with your budgeting, click here.

2. Reduce Cards
To be perfectly honest, who really needs more than ONE credit card? Although it is understandable to have an extra card for business expenses, gas, etc., you should try to avoid having too many. A good rule of thumb is to only have one card (or less) for every $2,000 you make a month. If you make less than that, more than one card is dangerous. Also, pay as much above the minimum you can each month, depending on what your budget allows.

3. Call Debt Collectors
If you are behind on a credit card payment, or have unpaid bills, then be sure to take care of it as soon as possible. Some creditors, like PG&E will work with you to set up a payment schedule, then you can make sure to work this into your monthly budget. Creditors work the same way, and will work with you so they don’t have to resort to debt collections. They may even just lower you interest rate if you simply ask.

4. Examine “Extra” Spending
Once you have taken into account your debt and bills, you may want to reexamine the way you spend some of your hard-earned cash. Do you really need the highest level on Netflix? Do you really ever use your gym membership? Can you eat-in a bit more? Making these small sacrifices will pay off big time in the long run, and lead you to a happier and healthier financial lifestyle.

5. Do Not Borrow
Bank loans and/or check advances are trouble when you are already in the hole. If you absolutely must borrow money to pay an important bill, ask friends and family first. Statistically, you are more likely to pay them back faster anyway, often with little or no interest.

6. Shop Smart
Getting into sales and coupons may seem cheesy or lame, but you would be surprised at how much you can save when you actually try it. There are sites on the Internet where you can print coupons, and the Sunday paper typically has loads of discounts waiting to be taken advantage of.

7. Frugal at Home
There are a whole lot of ways to save at home. Wear a sweater in the winter so you don’t have to run the heat, turn off lights in any room you’re not in, and turn off the water when you are brushing your teeth. You can also save by re-using and recycling things you have around the home.

8. Buy in Bulk
It’s always easiest to run to the closest fast food restaurant or grocery store and grab something for dinner; but since you have already budgeted for groceries, why not buy it all at once? It sounds difficult, but making a weekly meal plan is both easy and money-smart. Try forming many recipes out of basic foods, which you can buy in bulk at a food superstore. You’ll be amazed by how much you save with this tip; it could be hundreds.

9. Track Spending
While making a budget is a great big step, sticking to it is a little bit harder. To help yourself out, keep track of ALL of your spending as you go. Whether you use a checkbook or a small notebook to keep track of everything, having this extra reference and going over it at the end of each week will help you stay on track. For more information, or help with tracking your expenses Click Here.

10. Make Extra Money
One of the best and easiest ways to get out of debt is by finding a way to make just a little more income. If your schedule allows, you can try to find a part-time job. Or, if you have been shining at your current job then you might consider asking for a raise. You could even do something as small as having a garage sale. Many times life is a business and requires business decisions.

Tags: credit card debt, debt consolidation, debt free, get out of debt

This entry was posted on Wednesday, December 3rd, 2008 at 10:02 am and is filed under Credit, Debt Management, Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.