If you are one of the few people living debt free, then you are a very lucky person. In 2005, the average American had about $8,000 worth of credit card debt. Many Americans live paycheck to paycheck, and several are just months away from bankruptcy. If you are one of those lucky few or about to be there, living and staying debt free can be a tricky but rewarding thing.

Baby Steps
If you are just starting out living a debt free life, take baby steps; don’t try to do everything at once! Pick one task each month and stick to it. If you try to do everything at once, you will get burnt out and be more likely to have a binge. It’s just like dieting: if you try to lose 20 pounds a week, you are destined to fail.

Set Goals
Setting goals and sticking to them are very important to living debt free. Start by setting a goal every month and sticking to that goal. For example, start with setting a grocery budget for each week. Make your list, clip coupons, and only bring enough cash to get what is on the list. Many people are surprised about how much money they waste on stuff they don’t need at the grocery store. If you and your family eat at home every night, make a weekly menu. This will help you stay on track with your shopping.

Give Up the Small Things
I am sure that everyone has heard this before, but skipping little things like the morning trip to Starbucks and the afternoon trip to the vending machine can make a huge difference. Also, if you start packing your lunch, you will save a lot of money.

Fighting the Urges
No matter how hard you try, temptation is going to hit. If you try to never spend money, ultimately you are going to break down and want something. So instead of binging and putting it on a credit card, save for it. If it’s a new computer, put away a little every month. You may not get instant gratification, but you will feel more like you earned it.

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Okay, you think your debt is out of control. There may have been income changes, your budget doesn’t add up, bill collectors are calling about late payments and your stress level is through the roof! Not only do you need to reduce your debt, but the stress level as well. The question is HOW?

Well, first things first. Don’t PANIC! Try to keep it all as simple as possible. Notice I didn’t mention easy, only simple! Do you have a budget set up? If not, that should be your first step. You won’t know where to cut spending if you’re not sure where your money goes!

The next item on our simplicity list would be to make a detailed list of all your outstanding debts. Not your normal living expenses such as mortgage, utilities or food, but credit card debts, personal loans etc. By detailed I mean list interest rates and balances. That way you can target the highest interest rate debt first.

Next, look through your budget or your normal spending habits and see where you can cut some spending. Personally, I always choose the grocery budget first for cutting expenses. Some of the things I did were to start making snacks instead of buying them. It’s about half the cost, and lasts twice as long. The same goes for eating out. Now don’t cut all the fun and entertainment out of your budget, you’ll be less likely to save if you’re depressed about never going anywhere.

Ways to cut grocery spending: buy generic when possible. Not all generic brands will be as good as the ones you normally buy, you’ll have to experiment here. However pasta is pasta, instead of a name brand, try the store brand. Those little savings will add up. I went from spending $275 every two weeks to under $200. That’s a $150 I was able to put towards debt. Bake snacks for the kids instead of buying them. I still pick up their favorites once in a while, but normally I will bake cookies, or a cake or cupcakes. They last longer, and at half the cost you can’t beat it! Try to have a “cheaper” dinner 3-4 times a week. If you look around you can find easy recipes that won’t take long to make and won’t murder your grocery bill. And once a week we have Pot Luck, or clean out the fridge night. That in itself saves about $10 a week. Cut eating out down to one or two nights a month. Look for restaurants that have specials, or buffet styles. If you’re not picking up a “quick” dinner once a week, you will save more money.

The next place I usually try to cut spending is entertainment. Instead of going out to the movies, rent them, or better yet to save on running around town, join an online rental place. One low cost per month, and you pick and choose your movies just like running to the video store and picking them up.

Cheap entertainment suggestions: rent movies instead of going to the movies. Cost effective for a family of 4, it’s at least $28 just for tickets, not including the $15 or so you’d spend at a snack bar. Buy the same snacks for home, popcorn , candy etc. and it’s less than half the cost. Besides, watching at home always includes the PPP factor. PJs, Pause, Potty. Make it family night, watch more than one movie or set it up where each family picks a movie for whatever night you do it.

Parks and Trails. Taking a walk or an impromptu picnic with the family is always fun. Take along a mitt and ball, a Frisbee, whatever makes you happy. A lot of fun and the best part is free, other than the gas to get there. Get a fishing license and take the kids fishing. If you don’t want to fish, skip rocks, take a walk. One cost for a whole season. If you plan on going to an amusement park , zoo, water park etc, get a group together. Call family and friends and set a day where all of you can go. Look online or call ahead, find out what group rates are per person and how many people you need to have to get a group rate. This could save anywhere from $5-$10 a ticket. Also, pack a picnic lunch when you go. Eating there will cost an arm and a leg. Set a specific amount for souvenirs and games they may have. We usually set a limit per child, and when it’s gone, they’re done. By doing it this way, it allows us to still take day trips, and be able to afford it.

Saving on utilities is not easy! There are so many things you can do to cut your utility bills down. Especially with rates rising as they have over the years, but there are small steps you can take that will decrease your bill by a few dollars a month.

Ways to save on utilities: Make sure every thing is turned off when you leave in the morning for the day. Lights, radios, TVs etc. Turn the water heater down a smidgen. Not so much that you have a lukewarm shower, but enough that you aren’t heating so much water so fast. Call your utility companies and see if they work on a budget plan. You’ll pay the same amount every month, and won’t get any surprises in the heavier usage months. Only run the dishwasher when it is completely full. Check for drafts around windows and doors, making sure you aren’t heating or cooling the great outdoors! Only heat or cool rooms in your house you are using. Close doors to unused rooms, shut the vents etc. Manage your gas usage in vehicles. Combine trips whenever possible. If I notice I need something from the grocery store, and know I have to pick up my son, I will do both at same time. Or if I have no other place to go that day, I will wait until I can run two or three errands at once. This will also save wear and tear on your car.

The last place I look for money to save is vacations! Some families cut them out all together. However we miss the family interaction and basically just all being together some place other than home! Here are a few ways to save on family vacations

SHOP AROUND! I can’t emphasize this enough. Make a decision as to where you would like to visit then look at travel agents, online booking packages etc to find the best deal. Have the entire trip planned before you leave. If you are driving, pack some snacks, drinks, lunches that are suitable for eating on the go. If you will be driving for a long period, perhaps more than one day, only eat at a restaurant one meal a day, the rest pack. Find hotels that offer free breakfast , then eat before you leave. Buy your snacks throughout the trip at a grocery store, not when you get fuel! It may take 20-30 minutes out of your day, but it’s half the cost.

Okay, we’ve looked at ways you can save some money on your monthly expenses. Now, what to do with it? Go back to the detailed list we talked about. Rearrange your list in order of the highest interest rate. Put that account at the top of your list. Make that your priority to pay off first. Remember to make ONE account your priority to pay off. If you spread your “found” money around, you won’t see results quickly and that is discouraging. Take the money you’ve saved in your budget, and apply it each month towards that bill. If you pay the principal down you’ll be paying out less in interest charges. If you keep going, you’ll have the bills paid off faster than just making the “minimum” every month.

Other ways to save on debt: Call your creditors and ask for an interest rate reduction. Some will, some won’t. The worst that can happen is they stay the same. This idea will ONLY work if you stop using your charge accounts and credit cards. Get a consolidation loan to pay off your high interest accounts. It will be a lower interest rate, and one payment. However, if you pay them all off, then rack them all back up again, you will only be farther in debt. I’m not saying to cancel your accounts, just use them wisely. When you can, make extra payments on your mortgage. If you payment is $577, pay an even $600 and send a note with payment that you want the extra $23 to apply to the principal balance. If you can manage to pay ONE extra payment on a 30 year note, it will decrease the years you have to keep making payments. It will depend on your current rate as to how many payments would be taken off. If you get a tax refund, bonus check or other income that isn’t steady, divide it up! We divide ours in thirds. 1/3 in savings for emergencies or our “cushion” fund as we call it, 1/3 towards outstanding debt, and last but certainly not least, 1/3 for family fun! We go shopping, maybe buy the things we decided not to buy last month, take the kids out to a place of their choice for the day, whatever we feel like doing!

The only way any of this will work is if you work at it! It’s not easy to change habits, but it is simple to “find” money to pay off your debt and your stress level will lower right along with your debt. As you pay off your accounts, one by one, you’ll see you have more money to put aside for vacations, rainy day funds, or savings for retirement. Make it a family project, all get involved with ways to save money and decrease spending. Let the kids have a garage sale with the toys and books they no longer use, put the money aside and when they reach a goal, let them decide where to go. It’s a great way to teach them savings habits also.

Michael Russell
Your Independent guide to Debt Solutions

Compare Quotes From Various Companies

Once you get quotes, all you need to do is to compare debt consolidation programs offered by various companies. Select a company with most suitable option in your case because different programs are designed to cater to the needs of different people. If you are new to this concept then understand it clearly that you consolidate your debt by merging all existing loans into a single bigger loan.

As the sole purpose of entire exercise is to bring down the monthly payments to manageable limits, you should give utmost importance to getting lowest possible interest rates. Another important point to remember is that the company you are choosing should have experts in negotiating skills. Then only they will be able to get some measurable relaxation from previous lenders. More the rebate they get for you, easier it will be to come out of debt trap.

Takes Off Pressure Immediately

A big benefit of debt consolidation program is that it immediately takes the pressure off you. Now, you do not have to bother about handling so many nauseating creditors every month. Your accountability is restricted to make only one monthly payment that is well within your reach. It is a big relief because you can use your time in more meaningful activities now. A reduced amount of debt, more time to manage finances and sound support from experts can bring your financial life on right track smoothly.

Rishabh Sogani has been writing articles on various topics for more than two years. You can get your FREE copy of Debt Consolidation Loan Ebook and see more of Rishabh’s articles on Debt Consolidation loans on his website at Debt Consolidation Loans located at http://debtconsolidationloans.googlepages.com/