Personal Debt Reduction Strategies

Debt reduction is a worthy goal for anyone who has any kind of debt at all.  While there are those who would argue that there is good debt and bad debt, no debt is still the best kind of debt of all.  When you are in debt, whether it is so-called good debt or bad debt, you will need to employ some strategy for getting out of it.  There are many different kinds of strategies that people choose to employ, and some work better than others.  Here are some of the best ways to get yourself out of debt and stay out.

In order to develop a proper strategy for getting out of debt, you need to understand why you are in debt in the first place.  Keep track of everything you buy for a period of one month, whether it’s that little candy bar that you grab as a quick pick me up, or the cashmere sweater you’ve been dying to have.  Keep track of which things are impulse buys and which things are actually needed.  By doing this, you are showing yourself how much money you spend that you don’t actually need to spend.

When you have figured out how much money you actually do spend, use that list to figure out how much you actually need to spend.  Chances are that there are at least a few things that you can cut from your budget without missing them too much.  Cut out the things that you will miss the least first, and put that money toward paying down debt.  Even a dollar or two here and there adds up and makes a difference in the long run.  If you have cut out the expenditures that don’t hurt so much and you still feel like you need to cut more, keep cutting out things that you do not need so much, until you have cut all that you can.  Be careful not to cut too much, or you may start to resent your debt and rack up more debt because of it. 

If you have cut out all unnecessary expenditures and you are still having problems, it may be time to consider a second income of some sort.  This can be from a second job.  It can be from freelance work such as writing.  It can even be a part-time arts and crafts business, or selling some of your unwanted things on ebay.  Keep in mind, however, that this is not easily sustainable for a long time, so you will want to pay off your debt as quickly as is possible in this situation.  Bankruptcy is a very last resort after you have tried everything else to no avail.  Just remember that no matter what method you use to get yourself out of debt, you need to keep yourself out of debt once you are out.