73 Debt Elimination Tips

1. Don’t get into debt. Use cash for all your purchases and don’t take on any debt except home and auto.
2. Spend less than you earn.
3. When debt is closed out, put 60% in savings and enjoy the remain 40%.
4. Take stock of all your liabilities, so you know exactly how much you owe to the world. Put them in a spreadsheet, with monthly payments, interest amounts, balances, and a running grand total of all your balances. Update it monthly as you pay off debt, and watch the overall amount go down slowly. It’s very motivational.
5. Have only one credit card with a low limit, and only one loan with monthly payment not exceeding 25% of income.
6. Build up an emergency fund first. If you come into extra money (tax returns, etc.), use it to build an emergency fund and pay off debt after that.
7. Cut up your credit cards.
8. Speak to a credit counseling service to help work out a plan: your “must pay” outgoings, arrange with creditors to freeze interest and accept a revised monthly payment. Warning: a reader informed me that using a credit counselor will show up on your credit report and adversely affects your FICO score — not as bad as a bankruptcy, but it is coded, and lenders can see it.  Only exercise this option if you’re really in dire straits.
9. Stop using credit cards to make it to the next paycheck. Stop getting further into debt.
10. Don’t overpay your debts — leave enough so you have enough for regular expenses too.
11. Avoid eating out. Cook your own meals, except on very special occasions.
12. For entertainment, visit friends and be creative on how to entertain yourselves and your family without spending a dime.
13. Don’t pay off your credit card balance from the emergency account. Don’t touch the emergency account at all — it doesn’t exist!
14. Look for expenses coming up in the future and plan for them, so you don’t have to go into debt when they come up.
15. Make a budget – Purpose every dollar (including some buffer).
16. Snowball the debt – Pay minimums on everything, attack the smallest balance with all the extra cash you can assemble, then move on to the next one.
17. Be on the same page as your spouse or partner. Competing interests are suicide.
18. Recognize your spending tendencies (and your family’s) and place limits on them. Develop good habits instead.
19. Read Dave Ramsey. Read “Your Money or Your Life”.
20. Keep trying and don’t give up. Make a commitment, and if you aren’t getting out of debt slowly but surely, revisit that commitment. Change is difficult and it takes drastic change in mindset and behaviors to get out of debt. Anyone can do it – as long as you really want to do it.
21. Stop spending! You have to really, truly want to do this. Otherwise, you’ll put yourself on a financial diet and then crash and burn and find yourself justifying why you deserve to spend so much money on a new iPhone when you have a perfectly good phone and $20,000 in debt.
22. Praise yourself for every small accomplishment. But, don’t praise yourself by spending frivolously.
23. Find the tools that work for you and stick to them. If the tools aren’t working, find new tools. There are plenty of tools and ideas out there – for free.
24. Change yourself. If you have a spouse or partner that is contributing to the debt, it can be a big challenge to get them to change. Focus first on changing your behaviors and attitude.
25. Be realistic. If you started accumulating debt three or four years ago, realize that it will probably take you more then three or four years to get out of debt and stay out of debt.
26. Create a realistic budget. Put as much money as you can towards paying down debt and having an emergency fund, but allow for a little bit of. Only the truly dedicated can live with no social/recreational activities for the amount of time it takes to become debt-free.
27. Eliminate. Take a hard look at what’s truly necessary, and be willing to make compromises. Cable TV, satellite radio, and lunches in the office cafeteria are not necessities. If you have a hard time letting go of these things, run your numbers through a debt calculator twice – once with your current budget, and once with additional money currently paying for niceties. You’ll be amazed at how much of a difference those few extra dollars make.
28. Get creative. If there’s something you think you don’t have time to do more frugally, find a way around it. For example, cooking at home is much cheaper than eating out. If you don’t have time to cook, try investing in a crock pot.
29. Be patient. Debt reduction is a long, slow process. Depending on the method you use, you may see no significant progress at first, but it will happen.
30. Stop borrowing money – no matter what! This means no more credit cards, no more car loans, no more cash advances, no more home equity lines, etc. If you can’t afford to buy something with CASH you have now, then YOU CAN’T AFFORD TO BUY IT.

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