By Robert Stitt

Debt may seem like an eternal mountain, but you can be like the dripping water that eventually erodes it away. No matter how great the obstacle of debt may seem, you can have victory over your bills and liabilities. Sometimes, the greatest challenge is just knowing where to start. The Network Journal suggests looking at five ways to chisel down your debt this year.

  1. Stop overspending. If you want to eradicate your debt, you have to stop adding to it. The old adage says, “One step forward, two steps back”. In other words, it doesn’t matter how many positive gains you make if you keep adding even more liabilities.

Granted, if your spending has been part of a survival mode, then you are doing all you can. To determine this, you need to analyze your spending. You need to be honest about what “survival” is, too. Yes, you have to eat. But you do not need to eat out. You need clothes, but you do not need name brands bought new from the mall.

  1. Create a Budget Ledger. You don’t have to have a formal accounting degree or a leather-bound journal, but you should have a consolidated list of spending for several months. List what your debts are, the amounts that are owed, the minimum payments, how much you pay in interest, etc. Putting all of the numbers in one place can be scary, even overwhelming. Yet, until you know where you truly stand, it is hard to make real gains in debt reduction.
  2. Prioritize. Experts don’t agree on the best strategy for this step. Some say to start with the debt that has the highest interest rate. Others say to choose the smallest debt, pay it off, and then use the extra money to pay down the next largest debt, and so forth. Whatever method you choose, be systematic, but don’t forget to make the minimum payments on all of the other debts.
  3. Set Goals. As a people, we are motivated by achievement. Give yourself a goal, mark it on the calendar, and celebrate when you have victory. Goals can always be adjusted if your situation changes. The important thing is that you keep moving forward.
  4. Make more money. While this may sound silly, many people find that when they honestly look at their lives, they are not maximizing their opportunities. While we all need downtime to clear the head, we don’t need two to three hours in front of the television every night. If you are able to pick up an extra shift, a part-time job, or even sell things on Ebay or Craig’s List, the extra money can help to drop your debt faster.

The quest to be debt free is not an easy one, but with a few changes and alterations in the budget, it is possible to eventually bring your budget into the black.



Investing in your future