Tips for Eliminating Debt

Tips for Eliminating Debt

Got debt? Don’t fret, most people do. This trick is, how do you get rid of it? We’re here today with some practical tips for eliminating debt.

It’s time to free yourself from that financial burden!

Get a Handle on Your Finances

Any accountant or bean counting enthusiast will tell you it’s all about debits and credits. How much is coming in and how much is going out? Eliminating debt begins with getting a handle on this simple math equation. Easier said than done, right?

To take control of your financial situation, you need to make a budget. There are plenty of resources that can help get you started with that. After creating a detailed monthly budget you’ll have better idea of how much you’re currently spending, and how much you can afford to repay each month.

After this the hard part begins—finding ways to trim spending. Which leads to our next point.

Go Cash Only

The average American household has $15,762 in credit card debt. Putting it on the plastic may offer instant gratification, but can quickly lead to financial peril, and a slow, painful death by interest rate. Once you get on the credit card hamster wheel it’s hard to escape, but there is hope. And its name is cash.

There’s nothing like the strictures of physical dollar bills to limit spending. Only have $100 in your pocket? Well, that’s all you get to spend, isn’t it? No impulse purchases, no temptation to snag something you can’t afford. You’ll be amazed how much money you’ll save, which will put you on a path toward eliminating debt.

In addition to the practicality of limiting yourself to cash, there is a psychological component as well. There’s something visceral about forking over actual paper money, as opposed to the impersonal, carefree swipe of a credit card. Doesn’t it seem less painful to just see numbers instead of shelling out Andrew Jacksons and Benjamin Franklins?

To ease into the cash-free lifestyle, you might want to just pick one area of spending, and then go from there. Many people sing the praises of the cash-only diet, which forces you to pay for groceries and food with just cash. You might find yourself with hundreds of extra dollars a month.

Make a Plan for Eliminating Debt

Now for the matter of actually paying off that debt. It helps to have a plan, and to be aware of options. Some questions to consider: 1. How much money do you have set aside to pay down debt each month? 2. Which debts are you most urgently focusing on? (It may help to tackle one at a time.) 3. Have you tried renegotiating with your lenders to get a better rate? 4. Have you considered debt consolidation? 5. How about refinancing? 6. Or debt settlement?

Seek Advice

If all this seems a bit overwhelming there are resources available to help you dig your way out of debt.  Some debt elimination services cost money, while there are charities and government resources that offer credit counseling, budgeting assistance, and overall debt reduction assistance.

Whatever you do, however you decide to chip away at that monthly financial burden, it’s wise to move eliminating debt to the top of your priority list. A debt-free life is a beautiful thing.

Image Credit: Shutterstock