Although some of the tips contradict one another, they each have
good reasons behind them, and will work better in different
situations. Since nobody's debt is the same, and no two people
are the same either, use the ones which work best for your
It's hard to change, and it can be even harder to get out of
debt. Make a commitment, and if it seems like you're just
treading water, have a second look at that commitment.
Prevent debt by paying cash for everything and living below
your means – in other words, spending less than your income
Teach your kids how to not make the same mistakes you did.
Always know precisely how much money you have in your
checking account, and do your best to spend much less than that.
Stop spending before it's too late and you have to go on a
serious financial diet.
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Increase your 401(k) contribution by one to two percent each
time you get a raise – it won't be missed.
If you don't have a 401(k), act like your raise didn't happen
and just put the extra money into your debt.
Make extra payments toward your debt with extra money like
bonuses and overtime.
Realize that if it took you five years to get into this mess,
it's probably going to take much longer to get out of it.
Think about where you will be in five or ten years instead
of next month's payments to stay motivated.
Find your “why” to get out of debt. Is it so you can be
charitable, pay for your child's college education, or maybe
start your own business? The passion will help you find what works, stick by it, and
automatically drive you to do the right thing.
Make your debt repayment strategy a habit – something you
don't have to think about.
If you do think about it, consider it wealth rather than
debt. Think “this will help contribute to my overall wealth”
instead of reminding yourself you're in debt.
Or, think about debt as slavery. You want to break free of
Keep your mindset positive. Focus on the benefit of owing
less rather than the times you tell yourself no or realize
others have more expendable cash than you do.
Write “Do I really really need this?” on a piece of brightly
colored paper and put it in your wallet.
Imagine what debt freedom will feel like.
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Cook at home instead of eating out, except for very special
occasions. If you don't have time, get creative – maybe wake up
a few minutes early and cook dinner with a crock pot.
Come up with ways to have fun without spending anything.
Be a tourist at home. Look in your newspaper or
local-focused websites for ideas on free and cheap
Get down to basics. Learn to make and re-work furniture or
Grow food in a garden or pots if you don't have a yard.
Don't hate it 'til you try it. If cooking at home isn't as
bad as you thought, try an older used car, roommates, thrift
stores, and wearing a little more in the house to turn down the
Be ready to make sacrifices. Selling your car and getting a
used one without a payment can be just what your repayment
Make an emergency fund your number one priority. Whenever
you come into extra money, such as a bonus from work or a tax
return put some away for those rainy days then pay off debt.
Don't pay off your cards from the emergency fund either, act
like it isn't there.
Keep one credit card with a low credit limit, and don't use
credit cards to make up where your paycheck slacks off.
Put all of your expenses and debts into a spreadsheet, track
how much you pay, interest, and balances. Update it regularly
whenever you make a payment, and watch your debt drop.
Make another column in your spreadsheet for assets – or
things you can easily sell and their approximate value – and try
to make the difference in value grow more toward the positive.
You could also make a budget and assign every dollar to a
place. Plan ahead for future expenses so you don't have to
borrow again to keep up.
Try to make sure your debt repayment strategy doesn't cut
into keeping the lights on and food in the fridge.
Make sure your budget includes money for fun and social
activities. It takes a real dullard to stick by a budget without
fun for however many years it will take to get out of debt.
Be honest with your budget, and don't forget things like
Eliminate bills whenever possible. Luxuries like cable TV,
magazine subscriptions, gym memberships, and that fast food
breakfast can and should be dropped. If you're not convinced,
calculate your budget and debt repayment twice – once with the
luxuries, and once without.
Turning off your TV will also help curb your urge to buy,
along with throwing out catalogs and other ads.
Watch yourself and realize when you're buying something
because society expects it, your parents expect it, or to “keep
up with the Joneses.”
Surround yourself with people who are the way you want to be
so peer pressure doesn't get you into trouble.
Focus on your goals – if you want to spend more on housing,
kids, and have a stay-at-home parent, then where are you willing
to sacrifice time and expense?
Even a haphazard plan is better than no plan at all.
Once you have paid off your debts, save 60%, and splurge
with the remainder.
If you don't have much of an emergency fund, leave a big
buffer in your budget just in case.
Although it will show up on your credit report and hurt your
score, take advantage of credit counseling if you're in deep.
They can help you work out a plan and negotiate with your
creditors to help decrease your debt.
Fire a volley of money at your debt – pay just minimums on
everything to focus on one debt, and then move on to the next
one when it is paid.
Focus on high interest debts first.
Or, pay off your smallest balance first to get something
Don't just pay the minimum. Your debt will double every few
years if you just pay the minimum.
Bounce your debt around different credit cards through
balance transfers, just watch out for transfer fees.
Work with your and your family's spending habits, and limit
them whenever necessary. Make sure you are all on the same page
and agree to stick by the plan.
If your spouse or family isn't really coming along too well,
focus on changing yourself and lead by example. Don't make it
into a bridge jumping competition.
Reward yourself for every small accomplishment – but without
spending too much money.
Figure out what tools work for you and stick by them. There
is no shortage of free ideas and tools, so you have no excuse
for not experimenting.
Read books, publications, and blogs. A good place to start
is Dave Ramsey's “Your Money or Your Life.”
Moving into a smaller place will force you to get rid of a
lot of things which probably caused your debt and teach you just
how valuable they really were.
Change the way you think about purchases. Whatever you earn
and however you earn it, figure out how much you make per hour
and apply that in terms of time to your purchase. Is it worth
10, 20, 30 hours of your time?
Think small and long term instead of big and now – in other
words, fight for a 2% lower interest rate or cancel a luxury to
invest or pay debt with the difference.
Use shopping center sales and clipped coupons for your
weekly food shopping, and put the money you save into a savings
Look into second incomes, perhaps from starting an online
business without spending a lot of money.