Top Ten New Year's Resolutions for People in Debt

Home foreclosures, bailouts, layoffs, they all come down to irresponsible spending. Americans are living, no, scraping by because they've spent themselves into a black hole. It's time to make 2009 the year that we all get our acts together--without expecting handouts from the new president. Have you always thought debt is a part of life? It's not, it doesn't have to be unless you let it. It's time to make some new year's resolutions to get out of debt.

1. Stop Spending

Honest, stop spending money you don't have. 58% of you aren't cutting back on your holiday spending this year. The national average for holiday spending is $553, maybe that's your mortgage payment, maybe that would pay one of your utilities for a full year. Is Christmas really worth going into debt for? It's time to stop the insanity and stop spending recklessly.

2. Write a Budget... By Hand... On Paper

Start with your income. How much are you bringing in each month? Now itemize all your expenses for the month. Include everything on there, haircuts, prescriptions, oil changes, bills, rent, car insurance, pocket money, food, cigarettes, anything you have to spend money on must be accounted for. Lastly, add up all your debts from credit cards to car notes to mortgage.

3. Pay Yourself

You've added up all your debt, right? Has the number turned your stomach? Good, nausea is a great motivator. Before you go into a complete mental breakdown, remember to pay yourself first. Before you tackle that "Debts" column, you must make sure there is food on the table and electricity coming in. Take care of your Expenses first.

4. Make Money

Pick up extra shifts at work. Take a second job. Sell stuff on eBay. Get rid of one of your cars. Do whatever it takes to increase your income then put that extra dough towards your debt.

5. Create Momentum

We like results. And, sure, some recommend paying off the debts with the highest interest rates first. But if we don't feel like we're making progress we are more likely to fall into our old habits. That's why paying off the smallest balance first will inspire you to keep going. It's like dieting, we get discouraged when we don't see results right away. So get that momentum going!

6. Eat Cheap

When you're getting out of debt, nothing tastes as good as debt free feels. It's time to eat more macaroni, rice and beans. Have chicken thighs instead of breasts. Substitute homemade coffee for pricey lattes. It's amazing how cheap you can get with your meals with a little creativity. Every little penny saved only increases that momentum.

7. Shop Around

Start looking for cheaper car insurance, cell phone plans, internet packages, cheaper haircuts, cheaper gas, whatever you can think of. Get rid of cable, it's rotting your brain anyway. Once again, we're gaining momentum here.

8. Reassess

Where is your money going? Be sure to constantly check where your money is coming from and where it's going, revising your budget every couple weeks. Not being in charge of your money is what got you into debt in the first place. You are in charge now, you tell your money where to go.

9. End Dependence on Credit for Good

Listen close, credit cards are bad for your health. There is nothing a credit card can do that a debit card can't. Close your credit card accounts and live off the cash you have. Your credit score doesn't matter.

10. Build Wealth

Once the debts are paid, you'll be amazed how you can make money for yourself by investing conservatively in mutual funds. Find a reliable advisor in your area to help you invest all that hard earned cash and watch it compound.