Do It Yourself Debt Reduction - Debt Free For Life

Feb 5, 2011
Kelly Wallace

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If you need to get out of debt but can't afford to pay for a debt reduction program, there are ways you can do it yourself. In time you will be debt-free.

It’s easy to get in over your head and get into debt. With a home mortgage loan, car payments, insurance payments, utilities, food, and many other expenses, you can get behind in payments and max out your credit cards. Pretty soon you find that all that spending has led to a whole lot of debt. There are ways to slowly but surely rise above your financial burdens and ultimately be free and clear of debt woes. Being debt-free is an equal blend of changing your current spending habits and being smarter with your money.

Cut Credit Cards

This is one of the wisest yet most difficult tips to follow. When people see credit cards something in their mind believes it’s free money to spend on anything that catches their eye. Impulse buying is the number one reason people use their credit cards for. Avoid paying with plastic and use cash instead. Once your cash is gone, you can’t spend anymore. Some people find it easier just to cut up their credit cards since it's too much temptation.

Freeze Credit Card

If you don’t want to actually cut up your credit cards, you can follow this other trick. Take a half-gallon milk or juice container, cut the top off and stick your credit card(s) in it. Fill it half full with water then put it in the freezer until it’s a solid block of ice. Leave it there. That way your credit card is still available if you need it for an emergency, such as car repairs, but you won’t have easy access to it.

Financial Budgeting

Always live within your means. This seems like a no-brainer but the vast majority of people spend more, sometimes a lot more, than they bring in each month. Whenever you pull out that credit card to make a purchase you could be spending 20% or more for the item than you actually need to. Make a budget and stick to it. You’ll feel a sense of relief knowing that you aren’t spending more than you should.

Impulse Buying

Before buying anything you don’t really need, sleep on it for 24 hours or more. Most spending is impulse buys so letting it simmer in the back of your mind for a day or two will usually be enough to kill the impulse. You may find out you don’t really want or need the item any longer.

Pay More

If you’re always making the minimum credit card payment, car payment, or home mortgage payment then you’re not doing yourself any favors. To maximize your do-it-yourself debt reduction program you should try to pay at least 10% more on your bigger loan payments and double or triple on your credit card payments. If you do this every time you make a payment you could see your debt going down much faster.

Late Fees

It’s best to not ruin your credit in the first place but even if you’ve got a low credit score at this point you can eventually lift yourself up. Promise yourself that you’ll never be late on a payment again. Not only will this look good on your credit payment history, but you’ll avoid a lot of late fees that eat away at your paycheck.

Getting out of debt isn’t impossible and you don’t need to pay a debt consolidation company to help you do it. If you stick to a budget, pay more than the minimum on your monthly loan payments, and avoid using credit cards you’ll soon find your way out of your debt hole.