Debt Reduction

Fight For Your Independence And Get Out Of Debt

Let’s not wait until January 1st to focus on getting out of debt.  It’s July – It’s time.  Fight for your independence-  and get out of debt, today!

No doubt, a little dramatic, but you get the point.  Today is the day to start planning for tomorrow.  Here’s how I paid off my consumer debt – including credit cards and an automobile loan – plus some tips and tricks I’ve learned along the way.

Stop Borrowing – This is the key, first step.  Put the credit card in the wallet, and stop using it.  You don’t have to cut it up, or freeze it in a bucket water.  Make a decision to stop going deeper into debt – and then work hard every day to honor that decision.

Start Saving – I know, I know.  It’s easy to want to skip ahead and start paying off debt – and I’m the last person who wants to dampen debt reduction-based enthusiasm.  However, if you are going to make it through the entire process of getting out of debt, you will need an emergency fund.  The amount to save before beginning debt reduction?  I’ll leave that up to you – for me – I always tried to maintain a minimum of $2000 in emergency fund savings, even while paying off debt.

Pick A Strategy – There are several debt reduction strategies, including the debt snowball, the debt avalanche, and my own creation, the debt deluge.  They all work on the same basic principals:

  • List your debts – in the order determined by your strategy – and make minimum payments to all accounts.
  • Make an extra payment to the first account on your list.
  • Continue to make extra payments until the first account is paid off and eliminated.
  • After paying off the first account, take the combined amount (minimum payment and extra payment) which had been going to the first account, and apply it to the second account.
  • Repeat until all of your accounts have been paid off and your total debt has been eliminated.


Live On Budget – If you know where the money is coming from and where it is going, you can know how much “extra” there is for debt reduction.  I’ll have more on creating a budget, later this week.

Think About Interest – I always hesitate to talk too much about interest rates, even though they are very, very important.  I like the idea of living on a budget – and focusing on a sound strategy – and then looking for ways to reduce interest.  When I was getting out of debt, I “surfed” a balance from a high-rate card to a low-rate card, and this saved us a little money.  So, as you reduce your balances, you may want to take advantage of similar offers.  From time-to-time, one of my affiliate advertisers offers a decent interest rate – and if they do – I’ll share that information with you.

Time Is Money – With most credit card companies charging interest based on average daily balance – the sooner your payment arrives, the sooner it is applied to your account, and the lower your average daily balance will be.  Over time, this can save you a not-insignificant amount of money.

Get Pumped – Now, a bit about the psychology of getting out of debt and fighting for your independence.  We were created, I believe, to be both free and connected.  When we got out of debt, we were free from the “weight” of our debt – the worry and associated fear.  We were then able to spend time connecting with the people and things that were truly important to us.

Do It – For years, I listened to radio programs about debt reduction, I read books about debt reduction – I even attended a special conference about debt reduction.  Then, one day, I sat down, put my credit cards in my wallet, opened a savings account, drafted a debt reduction strategy, and I actually did it.  That’s the key – Start today for a better tomorrow.

Getting out of debt can be a struggle – but man is it worth it.  We don’t have to wait for a New Year’s resolution.  No, right now, we can declare our independence, fight for it, and get out of debt!

Insert “USA! USA! USA!” chant, here!  🙂

Be blessed.

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