According to ControlCreditCardDebt.com, as of 2009, the average American household is $11,840 in debt. This doesn't include mortgage payments or student loans. In short, debt is large and growing. Getting out of debt is a priority for many, but one that is difficult to achieve without changes in lifestyle. While increased earnings would certainly help towards getting out of debt, in most cases a change in attitude and priorities is even more important.
Step 1
Tally up your debt. Before you can approach paying off debt, you need to know how much you really owe. For best results, consider mortgage and student loans separately and make a list of everything else you owe, including personal loans, credit card debt and store layaways. Note the interest rate you're being charged for each one and what the minimum payment is.
Step 2
Negotiate everything. Call your credit card companies and ask for a reduction in their interest rate or request to be forgiven late fees or other penalties you might have accrued. If you pay a yearly fee, ask for it to be discontinued or reduced. Even a few dollars will help towards having the total debt reduced.
Step 3
Set up a plan of action. Determine how much you will pay on each debt, and which one should be paid first (the ones with the highest percentage rate should be your main goal). Add up all your debts and subtract that from your earnings. If you're coming up short, make adjustments in other areas in order to keep up with payments.
Step 4
Pay more than the minimum every month, even if it's just a few pennies. This will save you hundreds of dollars in interest fees in the long run.
Step 5
Find ways to trim your expenses so you can put more money towards your debts. Skip the morning gourmet coffee, switch to a cheaper cell phone plan or start brownbagging your lunch to work so you don't have to eat out every day. Small changes like this won't feel like a big sacrifice, but will increase your available money to help you pay off debt faster.
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