Do you lie awake at night wondering how you’re possibly going to pay down the debt you’ve accumulated?  Blurring the lines between want and need has been the reason so many people are in debt over their heads. This can cause an enormous amount of stress. The debt might be a result of over spending, medical bills or loss of a job. After you eliminate your debt, continue on your new austerity plan until you’ve accumulated at least three months of living expenses in one account.    Follow these recommendations from financial experts to reduce existing debt and keep from adding additional debt.


The first step is to account for every bill and every amount owed to creditors.  This includes purchases made on promises of no interest for a specified number of months.  While the total might seem overwhelming, you can’t get a handle on your debt until you know exactly how much you owe.  There are two schools of thought on paying down debt. The first school suggests that the debts with the highest interest rates should be tackled first. The second recommends paying off those debts with the smallest balances.  For purposes of this article, we’re recommending paying off smallest balances first. The reason being is the need for a sense of accomplishment and progress.  Commit to taking ten percent of your take-home pay each month towards debt reduction.  This will mean finding areas of spending that can be reduced. Instead of shopping at expensive department stores, you can find everything you need at quality discount department stores. Another option to speed up the reduction of debt is to take on a part time job in the evenings and weekends. Dedicate all of the earnings from this new job to reducing your debt.  Add the take home earnings from your part time position with the ten percent set aside from your primary job and this will be the new total that will be applied to reducing your debt. Divide the total debt by the monthly amount committed for reduction and this will give you a close approximation of how many months it will take to eliminate the debt. This is only an approximation as it does not account for interest accumulation. It does assume that no additional debt will be accrued. Congratulations on taking the first step.  Don’t look back; look forward to your new life without debt.

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