Strategy for Getting Out of Debt and Staying There

This article will present some good ideas on strategies for eliminating debt and how to stay debt free.

The strategies I will be presenting in the article are all well know but many of us just fail to implement them or don't remember them.

Just remember that it's not totally your fault if you are drowning in debt, some of the blame can be contributed to big business rhetoric and government promotion of over spending to keep the economy moving along.

Big business, like credit card companies, offers incentives that are way to enticing to turn down plus they do a good job catering to our emotions. But you can bet in the end you will be fully responsible when you cannot payback your loans.

Not all debt is bad; in fact it is pretty normal to have a mortgage and one car payment. This debt reduction strategy really focuses on managing your spending habits on nonessential items and eliminating high interest loans.

Listed below are steps one should take in order to achieve debt free status.

While you have debt you must learn to stop buying items that are considered luxuries. One of the biggest wastes of money is eating out, by not eating out several times a week you can save around $100 per week (family of 4). Packing your lunch can save you even more. You must stop going to the movie theater, instead rent a DVD or purchase a pay-per-view movie. That can save $40 right there alone (family of 4). You should try to stop wasting fuel by planning out your trips into town by creating a to-do list and stay in the same area for less travel. Another good way to save money is to turn down the thermostat to 69 degrees in the winter and 78 in the summer. I have personally save money by stopping washing closes that are not dirty and cutting back on using dry cleaners. Clean up your clutter and sell those items by having a yard sale or placing them in the local and/or online classifieds.

If you just sit down and make a list of all the spending you do I'm sure you can add other things to cut out or back on.

Now here is the section that will give you the formula for getting rid of that debt forever and if you learn to only live by your means after you become debt free, you will be able to start saving money instead of handing it over to the financial institutions.

First, write down all of your bills, exclude those bills that are considered essential, like utilities, fuel, mortgage, insurances, and food you buy from a grocery store.

Select the loan with the highest interest rate; do not worry about what the balance is. Apply all monies saved by cutting back and the minimum payment amount toward that loan. Do this until that loan is paid off. Next apply the money you were putting toward the first loan along with your minimum payment to the next highest interest loan. Keep doing this until all your loans are paid off. After you achieve that goal start focusing on your car payments and then mortgage.

If you commit to following this strategy it will not take long at all before you are totally debt free. The hardest part of this is staying focused and disciplined. Good luck!

Copyright 2006 Dennis Watson

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