How do I Get Rid of Debt for Good?

Many Americans are stressed about debt. Some lose sleep over it, argue with their spouses about it, or even have physical symptoms related to it. If you want to get rid of your debt once and for all, give yourself an extreme debt makeover.

An aggressive debt reduction plan requires a serious commitment. But paying down debt doesn't have to be an all-or-nothing proposition. I've heard people with debt reduction plans say "I'm never going to spend money again!" Now how silly is that? Of course you have to pay for housing, buy food, pay utilities, etc. And yes, you may even eventually have to buy Junior a new pair of shoes for his growing feet.

The key is to put together a workable plan with aggressive debt reduction techniques, while leaving wiggle room for an occasional treat that doesn't derail you from your goal.

If You Don't Use It, Lose It

According to a November 2009 article, in the Chesterfield Observer, there are approximately 52,000 self-storage units in the US, compared to about 10,000 in the rest of the world. That's a whole lot of stuff sitting around unused.

Even if you don't rent a self-storage unit, you may have a lot of stuff cluttering up your home. Say goodbye to those dusty collectibles, the abandoned exercise equipment, toys, furniture, old electronics, and other items taking up space around the house. Advertise your event on eBay or craigslist and hold the mother of all garage sales. Take every last cent you earn to pay off debt.

If You Can't Afford It, Sell Your House

Get out from under the ball and chain of a mortgage. The housing market has been tough, but people are still buying homes. Make your asking price competitive by scouring the comps that have recently sold in your area. You may have to sell your home for less than you want, but in the long run you'll come out ahead. Especially, if you're racking up more debt on credit cards to pay basic living expenses so you can pay a mortgage you can't afford.

If You Get a Windfall, Put It Toward Debt

A windfall can come from any place at any time. No, don't run out and play the lottery in the hopes of winning a big payout. Think in terms of tax refunds, rebates, monetary gifts, or bonuses at work. Many people get unexpected windfalls in their hot little hands and run out to buy a bunch of goodies. A better plan is to throw all this money toward your debt. If you honestly think you may feel resentful for not treating yourself, and as a result may fall off the debt-payoff wagon, look for something that cost less than $10 or $15 to enjoy.

Let Your Feet Do the Walking

Do you regularly fill up your gas tank and put it on a credit card? Driving your car less can cut your gas bill and give you some exercise. Do you live within walking distance of the supermarket, post office, drug store, or other places you run errands? Why not leave the car at home next time, and do your errands by foot or bike. If you have a lot to carry, use a cart or wagon to carry your bags. Consider giving up the car for your commute and use public transportation, or set up a carpool. Pick a debt to focus on and put all the money you save toward it.

Become a Do-It-Yourselfer

Do you regularly spend $30, $40, $50 or more on haircuts, manicures, facials or other personal grooming every few weeks? If so, cut back by making fewer trips to the salon. Only visit the salon for chemical treatments or other processes you really can't do at home. Look for discount days at local salons or find a friend who knows how to cut and style hair.

Also avoid hiring people to do odd jobs around the house that you can do yourself. Yes, it's nice to have a maid, lawn service, snowplow guy, etc. But you can save a nice chunk of money on these services and put it toward debt reduction.

The final part of your extreme debt makeover plan is to get rid of your credit cards. By cutting up your credit cards and paying cash for your expenses, you can keep yourself on the road to debt reduction.

This Guide to Money answer includes the topics: Protect, Debt.

Francine Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows. Visit her Web sites www.Huffwrites.com and http://supersavvyspender.blogspot.com/.

 
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