Practical steps to get out of debt, even in a

Practical steps to get out of debt, even in a bad economy

During better times, most of us racked up substantial amounts of debt which are coming back to haunt us now. The average American is sitting on about $9000 in credit card debt alone! The dire statistics on home mortgage foreclosures speaks to the state of the current economy. While most of us never intended to get in debt over our heads, just about everyone is now focusing on how to make ends meet and then to get out of debt. A formidable challenge, indeed!

However, if you're prepared to batten down the hatches and get serious, there are ways to get out of debt. Dealing with finances is not everyone's favorite task, but when times get tough, you've got to accept that your former lifestyle needs a good dose of downsizing. This is not to say that getting out of debt needs to be an excruciatingly painful process of complete deprivation. As the old saying goes, 'when you've got a lemon, make lemonade'. In order to get out of debt, you need to re-prioritize your needs versus desires. Let's take a look at how you can restructure your lifestyle and expectations to start getting rid of debt.

First, you'll want to work up a spreadsheet which reflects your current expenditures. Save every receipt for every purchase and payment you make each month. If you're behind on a payment, analyze those receipts and see where every dollar went. Go over that spreadsheet and be brutal in assessing each expense. I can guarantee that you'll find plenty of items you paid for that were not necessities.

Magazines are a good example. This entertaining reading material has become an extravagance, some sporting prices of $10 for a single issue! If this is one of your indulgences, you really don't need to give up the entertainment read online. Most magazines have websites where you can get all the entertainment you want for free.

If you buy just one magazine per month, let that $10 go towards a credit card payment or the utility bill. If you subscribe to a satellite TV service, examine the bill. Do you really watch all 200 channels? Cutting back to a more modest package and price can easily save you $20 a month. How about your cell phone plan? Can you trim some of that cost? Probably. When you are trying to get out of debt, every dollar counts. The $75 pair of shoes do you really need them or is this a luxury you might do without? Just these three examples of those little incidentals add up to $105 a month.

The trick to taming your budget is to identify what constitutes a luxury. As you're perusing your spreadsheet, remember that food, shelter, required insurance and utilities must come first. Everything else is beyond survival. Have a family sit-down and brainstorm how you can cut expenses. This can almost become a sort of game, a reverse of 'Who wants to be a Millionaire?' This game is called 'How much money can I not spend?'

Put that money you've cut from the budget to paying down a credit card instead. You'll find you get far more satisfaction by whittling down that credit card debt than enjoying these few luxuries. You'll actually feel happier as you see your debt creep down. Credit card debt is one of the most insidious types of debt instruments. The interest never quits and if you're late on a payment, you're fined a substantial penalty and suffer an increased APR as well. Each time you make more than the minimum payment, on time, you're one step closer to getting out of debt.

Another quite effective technique you can use to get out of debt is to make use of credit counseling services. Get online and check out the services with a '.org' suffix to the url. These organizations charge nominal fees and can assess your specific financial picture, negotiate lower interest rates and put together a payment plan that helps you get out of debt in the least amount of time.

Doing the weekly food shopping can be a shocking and depressing experience. If you want to get out of debt, do yourself a favor by planning menus that coincide with the weekly sales. Use coupons and rain checks. Never shop when you're hungry. If beef is on sale, stock up and spend a Saturday morning making several meatloaves, portioning out burger patties and frying up some taco-seasoned beef and meatballs. Freeze whatever you won't use immediately and pencil these meals in to your meal calendar. Shop the grocery outlet stores for big savings on canned goods and other non-perishable staples. The truly diligent shopper can realize 40-50% savings on food costs. Now that's a mouthful for your budget!

If you want to get out of debt, you've got to redefine for the times. Identify the expenses which are necessary and start slashing those which are not. Realize that every dollar you save is a dollar earned. Right down to paper towels besides saving a tree, buying microfiber, re-washable cloths is an eco-friendly and budget friendly alternative. You have a handy wipe and help the environment too.

To get out of debt, put all of your resources to bear. Be practical, correctly identify your necessities and put every excess dollar towards your debt. If you employ all of these strategies, you will get out of debt.