How to Decrease Your Debt

by Mary Ann Romans | More from this Blogger

26 Feb 2009 05:43 PM

If you find yourself drowning in expenses and don't know how to get out of it, you aren't alone. The average household owes $18,000 or more in credit card and other debt. If you have completed a budget and know that you are spending more than you are making, then you absolutely have to decrease your debt, no matter what. Here are some steps to take.

First, stop using your credit cards. Cut them up, lock them away, give them to a trusted relative to hold, whatever it is that you need to do, but just stop. What if there is something that you need to purchase with a credit card? Use cash. Yes, you can even by a plane ticket with cash, if you need to do so. Not using your credit cards means that you can only make purchases with the money you have not with the money you are borrowing. It will help you live within your means.

The next thing you do is to go into challenge mode and give as much money to your debt as you possibly can. Find new ways to cut expenses and earn money, and then take all of that money to pay down your bills. You could either pay down the highest interest debt first or the debt that is the smallest. The first saves you the most money, while the second can give you a sense of accomplishment as you eliminate a debt.

Some ways to round up extra money for your debt include:

Canceling unnecessary (to survive) expenses such as cable, cell phones, gym membership, magazine subscriptions, Internet, etc. While we feel as though we can't live without some of these things, the reality is that people have survived a long time without some of these items.

Taking on an extra job. Even a few bucks more a month could help pay down your debt. You could work in a supermarket, the mall, babysit, walk dogs, deliver papers, do someone's taxes, whatever you can and are willing to do to pay down that debt. Selling unneeded items to raise money. You can generate thousands of dollars by selling stuff that is taking up space in your home. You can also consider giving up a car. This will generate money and cut down on expenses.

Mary Ann Romans writes about everything related to saving money in the Frugal Blog, creating a home in the Home Blog, caring for little ones in the Baby Blog and now relationships in the Marriage Blog. You can read more of her articles by clicking here or subscribe to the blog using the subscription box on the right.

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Learn more about Mary Ann Romans

Mary Ann Romans is a freelance writer, wife and mother of three children. She lives in Pennsylvania with her husband, the kids and a 16-pound cat.

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