Tactics to Eliminate Debt

Debt, especially credit card debt, can accumulate rapidly, and many people soon find themselves barely able to make the minimum monthly payments. Whether you are already overwhelmed with credit card debt or want to prevent debt problems before they start, use these steps to keep the compulsion to overuse credit cards in check, prevent minor credit card debt from spiraling out of control, get out from under excessive debt, and repair your credit.

One strategy that can work to keep you from overusing your credit cards is to put them in the freezer. The thought process is that you will have time to reconsider the purchase while you wait for your card to thaw out. A little extreme, perhaps, but effective!

Repaying your credit card debt will take less time if you have a solid plan. A proven method of reducing debt is called debt stacking. Also known as accelerated debt payoff, debt-stacking works as follows: First, determine the interest rates that you are paying on each of your credit card accounts. Decide how much you can afford to put aside for debt repayment each month, and pay only the minimum monthly payment on all the debts, except the one with the highest rate of interest. Then, apply whatever money you have left over toward the account with the highest interest rate. When the top interest rate account is paid down, repeat the process concentrating on the next most expensive debt. This method of debt repayment will shave many months off of the total time it takes to pay off your debt.

This next tactic I will share with you is to use in conjunction with the above method but be forewarned, is not for the faint of heart. But I promise you that it is achievable if you use a lot of discipline AND have a dual-income relationship. Now I am not trying to discriminate against you “non-partnered types” out there, and it can be used with one person, as long as they have two sources of income.

The idea is to work towards having one salary cover all the monthly expenses. And when I say this, I mean ALL of the costs, rent, utilities, groceries, gas, etc. Now I know you are probably saying, “Well, there is no way I would be able to do this.” And you may not be able to do it entirely, but the closer you get to it, the faster you will be debt-free.

And you will be surprised, that after you take a hard look at where your money is going, there is a lot of wasted money that you can use to pay down your debts and get back on track. My husband and I used this tactic early in our relationship and were able to pay off $35,700 worth of debt in a 24-month time frame. Now, I’m not saying it was easy, but the feeling of accomplishment was HUGE!