Simple Ways to Get Out of Debt

One of the most popular New Year's resolutions is reducing or eliminating debt. However, many people don't know how to go about this. There are a few easy things you can do to get rid of debt.

First, cut spending. Buy only the things you need. Use coupons, scour store ads and buy things on sale or in bulk. This will free up more cash to be used to pay off your debt.

Next, make a budget and set goals. If you have a clear goal to work towards, it's easier to stay on track, and know where you stand on your quest for debt freedom. Make a list of your debts, and determine how much of your paycheck you will have each month to apply to those debts. This will help you figure out how long it will take to pay each debt off. You can make a copy of this list to keep in a prominent place in your home (refrigerator, bathroom mirror), to look at as a refresher, or to keep yourself motivated.

You might also consider extra sources of income. If you've found this article, chances are you are aware that you can make money by writing for Helium or other websites. You can also sell items on eBay or Craigslist or have a yard sale. A second job (waiting tables or delivering pizzas or newspapers) may be an idea. Also, look into doing mystery shops, or audits. All of these ideas are great ways to make money to apply to paying off debt.

It may be helpful to contact your creditors and try to renegotiate the terms of your loans or credit/charge cards. Some creditors will reduce your interest rate, or settle the debt for pennies on the dollar. Be careful, though - settling a debt may give you a black mark on your credit report. If you are in the military and your debts were incurred before you went on active duty, make sure you take advantage of the protections offered by the Servicemembers Civil Relief Act (SCRA). You can have the interest on your debts reduced (the cap is 6%, but some creditors will reduce the interest rate to 0% for the entire term of your active duty service).

Knowledge is power. Seek information on reducing debt and cleaning up credit from reputable sources. Dave Ramsey and Suze Orman are two of my favorite financial gurus. You can purchase their books and CDs online at websites such as Amazon for a fraction of the new cost, or consider checking them out at the library for free. You can also join forums to speak with like-minded individuals and help you stay motivated. www.llnoe.com is a great website, and the members there follow Dave Ramsey's principles.

All these steps are relatively painless and don't take a lot of time to do. For just a few hours of your time, you can save yourself a lot of money, and reduce stress. Good luck!