Digging Out of Debt

Student loans, car loans, credit cards, hospital bills, keeping up with the Joneses, and spend, spend, spend. If you're like the average American you are saddled with thousands of dollars of debt. Debt is killing us, literally. The burden of debt causes stress, sleepless nights, and health problems resulting from stress. If you are serious about getting rid of your debt there is help. It may take years and you may have to make sacrifices you think may be impossible but think of how much better you'll feel when you don't have that burden hanging over you. Don't let debt keep you up another night make a plan to start digging out of debt.

Start with the small stuff

You have to know where your money is going. Keep track of every penny coming in and going out. Keep a small notebook and make two columns one for in and one for out. Every day write down the money that comes in, paycheck, monetary gifts, the penny you found on the street. Write down everything you spend. Do it for a month to get a good picture of where your money is going. The results may be shocking to you. What really was a wake up call for me was seeing that one month I spent more than I took in. That right there made me want to control my spending immediately.

Decrease Spending

Is it really that simple? Once you've gotten a handle on where your money is going, look at ways to cut all unnecessary expenses. Do you really need premium cable? Can you just go with the basic channels, or no cable? How often do you eat out? How often do you go shopping? Do you need that coffee from Starbucks every day before work? Are you paying for a $100 a month gym membership and never go? Do you need that cell phone contract? If you don't use it think about canceling or just switching to a cheaper prepaid plan. Think of ways to cut utility bills, insurance rates. Everything adds up. Think long and hard about your spending habits. Before you spend another dime think about if it's going to put you closer to or away from more debt?

Try a buy nothing month. Did I read that right, buy nothing for a whole month? Nope, impossible, can't do it you say? Try it see if you can have thw will power not to spend on non-essential things. For a month really think about what you are spending your money on. Do you really need another pair of shoes when you have 50 pairs already? Make a pledge that for one month you won't even drive by a shopping mall.

What if my bicycle needs a new tire or I need new dishes? You don't have to buy new all the time. I absolutely love www.freecycle.org There are chapters of Freecycle worldwide. This is a great place to look into if you have anything to give away or you are looking for anything. It's free and you won't believe the stuff people give away. I've seen people list cars and boats here. It's a great alternative to buying new things and running up more debt especially if you don't have a lot of money. Besides Freecycle check out your local thrift stores or yard sales. These are great places to find bargains.

Now that you've gotten a handle on your spending it's time to stop spending! Cut up those cards! You're digging your way out of debt you don't want to get deeper by continuing to use credit cards, so get rid of them. Call your credit card companies and ask them to lower your interest rate. All it takes is a phone call. If they say no they say no but it never hurts to ask. You can definitely save money by lowering your interest rates. Can you consolidate your cards? If you have five cards with balances on each, see if you can transfer the balances to a card with the cheapest interest rate.

Increase income

There are lots of ways to increase your income. Can you work overtime or weekends at your current job? Get a part time job. Clean out your closets. If you're like most people your house is filled with junk you don't want or need. Why not get rid of it and make some money at the same time? Sell your items on Ebay or have a yard sale. You can make some quick cash with not much effort. You don't have to go far from home to find ways of making money. Look to your neighbors. Can you cook, clean, paint, baby sit, pet sit, do yard work, run errands for the elderly? There are lots of ways you can earn extra money.

These ideas are just a start for you to get a handle on your debt. You don't have to let debt stress you out, just make a plan and try to stick to it. It may take a year or five years. Start putting more money into your pockets instead of your creditors. You'll feel much better when you're not a slave to debt.