Stop Incurring More Debt – The easiest, and most effective, way to reduce debt is to stop incurring new debt. Incurring additional charges on your credit cards each month makes it harder and harder to reduce the balance you already have. Unless you stop, reducing your debt will be virtually impossible. You must redefine necessity. In order to live you need food, clothing, shelter, and transportation. Everything else is negotiable.
Use Cash – Spending cash is much more difficult that using plastic. When you have to hand the cashier actual dollar bills something in us is affected. We do not want to part with our money. This is exactly why you should use cash to pay for food, gas, clothing, and entertainment. Each paycheck, go down to the bank and withdraw money for each of these accounts. Place money in an envelope earmarked for one of these four categories. Once the money in that envelope is gone, you are done buying items from that category.
Try and transfer high interest rate cards to a lower rate card – This is actually easier than most people think. Simply call up the credit card company and tell them that you are considering transferring your balance to another company that offers a more attractive interest rate. Ask them to lower your rate or inform them that you are going to take your business elsewhere. If they refuse to lower your rate, find a better deal! Do whatever you can to reduce debt .
Pay off small balances first – List out all of your debts from smallest to largest. Attack this debt with intense focus. Sell something on eBay or Craigslist and send the proceeds off to pay down this debt. Get a second job and send all of your income off to pay down this debt. If you want to reduce debt , you must take action now. Once that small debt is reduced, move on to the next smallest amount. Attack this bill the same way you did the first one. Continue this process until you are debt free .
Stop Using the ATM – Unplanned usage of the ATM only leads to overspending. Stick to your plan and spend only what you HAVE to spend to get by. It is not forever, just until you become debt free .