Debt – it’s the one little word that has the ability to send most people running for cover.  You can run but unfortunately, you can’t hide.

The topic of debt is a tender subject.  If you find yourself in debt, it’s difficult to listen to people chastise you on how you shouldn’t have gotten so for behind financially in the first place.  But I’m not here to lecture you, that’s not going to do any good.  The fact of the matter is you’re in debt, no sense dwelling on coulda, woulda, shoulda’s.  The best thing you can do now is to get a realistic plan together and work hard towards your goals.  The following are four steps you can take to get yourself running on the right path:

1. Keep track of everything you spend.
One of the secrets for losing weight is to keep track of everything you eat so you can pinpoint where your weaknesses are when it comes to food.  It’s the same concept with your spending; you need to figure out where all the money is going!

Here’s your challenge; for one month, write down every single dollar you spend – that includes everything from the coffee you got at Starbucks to the pack of gum you bought at the gas station.  Once you realize what kind of items your money is going towards, it becomes crystal clear where you need to make changes and cut back on your spending. 

2. Create a budget and stick with it… seriously.
By creating a budget, you are putting yourself in control of what you spend your money on instead of just reacting to your impulses.  Start by making a list of your fixed expenses such as your house, car, phones, tv and insurance payments.  Look at the list and see if there are any places you can cut back; do you really need the most expensive tv package?  Could you live without unlimited texting on your cell phone? 

Next list all of your non-fixed expenses such as food, gas, utilities, clothing, medical, entertainment, etc.  Give yourself a monthly dollar amount for each category.

  Now here is the key to making it all work – actually do it!  The easy part is making the budget; the hard part is sticking to it.  No one can force you to do it; it’s all about your own will power so do things that can help you stay strong.  Many people use cash envelopes, these are great because if you use up all your money, your done, you have no more cash to spend above what was budgeted. 

3. Use the debt eliminator system.
Chances are you have heard of the debt eliminator system before, it’s not a ground breaking idea, but it’s great because it genuinely works.

Start by writing down each of your debts with your monthly payment and the payoff amount.  You then work toward paying off the smallest debt first.  After you have repaid the first creditor, add the amount of that monthly payment to the payment for your second creditor. When that debt is paid off add both of those payments to the payment on your third debt.  It’s as easy as that.  Keep
doing it until all your debt is paid off.

4. Start a “put-and-take” savings account

Being in debt can be a vicious cycle because when you are putting all your money towards paying off your debts, you have no free money to use when emergencies arise.  So what happens when something comes up?  You end up adding more debt to your existing mountain. 

When you are struggling to make monthly payments, the thought of a savings account may seem 
crazy, but the fact is you will never be able to remain debt free unless you have a savings account to use for major purchases and emergencies. 

Add a certain amount of money to your monthly budget to put into a savings account.  Only use this money for emergencies or for big purchases.

To get yourself out of debt, you either need to: 1. Win the lottery or 2. Make a plan and stick to it.  The odds of number one happening are not so good.  But if you choose to do number two and follow the steps outlined above, you will find the odds are in your favor and one day you will know the joys of debt-free living.