10 Concrete Strategies To Get Out Of Debt

1 Stop racking up any more debt and instead, start using cash.
Cut up and throw out your cards and use cash. Without the tools to incur debt, you won’t. The key is persistence and applying the strict cash regimen as long as you want to control your spending. Along with sticking to cash transactions, work on a budget if you haven’t done so already, and carefully track where all your money goes.

2 Don’t spend on things you don’t need.
You should carefully consider each purchase you make, perhaps only spending for what’s necessary. Also, try to avoid impulse purchases. I have relatives who are in debt but have an addiction to shopping. Until they face the music on their shopping addiction, they will never get out of debt.
3 Develop frugal habits and make cutting costs your top priority.
There is an element of sacrifice needed to ensure that your money conservation strategies work, but by sticking to your cost cutting plan, your discipline and dedication will eventually be rewarded. There are a lot of frugal blogs that can help you in this regard!

4 Find ways to increase your income.
You can build your income and increase cash flow through a variety of ways, such as through side jobs and investments. You can increase your income by actively pursuing and snaring a high paying job or getting a raise. Or perhaps you can develop additional income streams by supplementing with a secondary job or side business. Make sure that once you make more money, that you apply it against your debt and not towards additional purchases. I say this because I have friends who have massive debt and who were able to secure second jobs to increase their income. Their extra income gave them a boost of confidence and a sense of complacency so that instead of wiping out their debt, they decided to buy even more stuff. You don’t want to fall into this cycle.

5 Have a spending AND a savings plan.
Set your goals and write them down. You’ll be surprised how an actual plan which you review on a regular basis can help with keeping you on track towards your goals. For spending, set a budget and as much as possible, keep within the limits of your budget. With saving, commit to a savings goal every month, set the amount aside, preferably automatically. By charting your progress, you will be further encouraged about staying on track.

6 Use your debt payment plan as an opportunity to establish a savings program.
Once you’ve established a system for paying down your debt, you can use this very same system to build your savings once you’ve conquered your debt. Once all your loans are paid off, you can start routing your payments to your savings account instead of to your creditors.

7 Pay above the minimum on any loans you own.
If you have limited resources, focus on paying down your highest interest rate loans first, particularly those considered “bad debt”. Try to pay more than the minimum on those most expensive loans.

8 Consolidate your debt to simplify your payments.
Consider transferring your credit card balances to lower interest rate cards but be aware of the transfer fees that apply. It’s normally still worth doing when you consider the savings you get from cutting down the interest rate on your debt. Or how about looking into loans that

have more favorable terms altogether?
You can check out person to person (peer to peer or p2p) borrowing opportunities through sites such as www.Prosper.com for potentially cheaper loans.

9 Make the best use of your money.
If you have money saved up earning very low rates of return in a cash account, utilize these funds towards paying down higher interest debt. There’s been discussion around the blogosphere about whether you should build an emergency cash fund while you still have debt to take care of, and the resounding advice has been to pay down the high interest debt first because of how much it’s costing you.

10 Devise your debt payment program and stick with it.
You can decide to pay off your loans with the smallest balances first, which is the more emotionally gratifying approach since you are able to retire your loans much faster this way. Or you can pay down your most expensive loans first, which will cost you less in the long run. But whichever strategy you choose, what’s most important is that you stick to the system.