Digging Myself Out of Debt: My Most Ambitious New Year's Resolution Yet!

I am straying from my typical new years resolution of going on a diet and losing weight. This year I am embarking on a plan to shed a huge weight off my shoulders by going on a financial diet. 2009 is going to be my year to become debt free. This is no small task. I have mounted up a couple credit cards on top in addition to my car loan. I don't want to become one of the statistics you read of people who lose everything because they were too over extended. Of course I feel apprehensive about my goal but I also feel excitement. It will feel so great and be such a relief to be debt free. To get to any new destination a person needs a road map. I have five steps that I will follow in order for me to achieve my goal.

The first step may be the most difficult but it is important to have a starting point and a frame of reference so I am gathering all my financial information. My income, my monthly bills, my debt. In order for my plan to succeed I will have to begin with a complete and accurate view of my finances.

Once I know exactly what I have to work I can draw up a budget. There are many free budget worksheets online such as the one I found (http://www.alwaysfrugal.com/household_budget_worksheet.html). The budget is vital to this endeavor. Once my budget is complete I will know exactly what I have to work with and where my money needs to go. The essentials such as housing, car payment, insurance, utilities groceries are just that, essential. Not much I can do to trim those but the non essentials such as cable, cell phone, internet, subscriptions, restaurants, entertainment is what really needs my attention. Since I am not planning on living like a hermit for the next year I realize that I do need to save some money in my budget for entertainment. I plan on shaving it in half. Drastic yes, but totally doable. I do not need Starbucks or magazine subscriptions. I can utilize my local library for free and read magazines there. Cable , internet and cell phone plans might have a less expensive or even a bundling package that may reduce the monthly bill so I will check on that.

The urge to purge is the third step. I will go through my house with a fine tooth comb gathering anything that I do not want, need or use and separate these items into three categories: Craigslist, Ebay and Goodwill. The larger things such as furniture and exercise equipment I can list on Craigslist at no charge to me and sell to someone nearby for pickup. Easy money! Hey, I can put that towards my debt. Smaller or lighter items would be better suited to sell on Ebay such as movies, video games, pocketbooks, costume jewelry, cocktail dress. Again, any extra money I can use towards my debt. Extra items such as everyday clothing, kitchenware and shoes I will drop off at Goodwill with an itemized list and ask for a receipt. All Goodwill donations are tax deductible. If I end up itemizing at the end of the year this may come in handy.

The fourth step is to stop. Plain and simple I need to stop and think before I buy something. Stop and ask myself if that is helping me get out of debt or helping me get further into debt. I am a creature of habit therefore I need to break the old habit of impulse purchases and give real thought to what I am spending my money on. I will post my financial goals on my bathroom mirror, bedroom dresser, refrigerator, car visor and on my wallet. Out of sight, out of mind will not come into play. Keeping my goals in sight at all times will help be remember what I am working towards.

My fifth and final step of this is to not do it alone. I am going to ask friends and family for their money saving tips, scour the online forums for good information. Knowledge is power. I will go to the library and read books on budgeting and personal economy. Letting others know of my goals is important to not only enlist their support but it will give me that extra measure of accountability.