Have A Budget – You Only Need To Do It Once (…every 6 months)



Let's get real, if you want to know how to reduce debt you need to know where you are right now. If you don't know what you're spending or earning, how can you possibly know where the problems are? As for ‘budgeting' if you think of it in terms of ‘lack' it will just make starting harder. But if you're crazily optimistic like me and think of budgeting in terms of abundance, it'll be easy. Well easier. So how does budgeting translate to abundance? Simple. If you take care not to spend on things you don't really need, or things you don't have the cash for (hallo credit card hell) you'll suddenly find you have a lot of it, cash I mean. You will be abundant. Don't believe me, have you tried it?

Deal With The Basics And Then Forget Them

Set up automatic payments to take care of regular expenses, that way you won't forget to pay them or spend the money on something else. Another winning strategy is to work out how much you need to take care of regular expenses such as rent, utilities, car payments, Hire Purchase and so on. By transferring a regular amount from your weekly or monthly wage into a special payments account for these regular expenses, there is less chance that you'll spend it. And you won't miss it if you never see it in your regular account, believe me this is a great 'how to reduce debt' trick.

Avoid Any Further Debt – This Is Serious Stuff

Brace yourself…to reduce debt as fast as possible cut up your credit cards. If you don't want to carry cash then only carry the type of card that's linked directly to your bank account. That way you can't spend money you don't have. And if you're thinking about a ‘consolidation loan', then go no further than that. Thinking I mean. A loan like this is no way to reduce debt, it may reduce your monthly payment, but it will blow-out the amount you owe as well as the years it'll take to pay off. You'll end up paying far more than you originally owed and will not have reduced debt in any way, quite the opposite in fact.

Make It All Into A Game

See how long you can go without actually buying anything. And try this amazing reduce debt trick. Work out what that pair of gorgeous shoes is really going to cost you. Just how many hours would you have to work to pay for them? Let's say they were going to cost you $150, a reasonable amount for gorgeous shoes, or is it? Check this out. If you were paid $20 an hour you'd need to work 7 and a half hours to buy those gorgeous shoes, a whole day at work for a pair of shoes. But just a moment, the $20 is your pre-tax hourly rate, so let's say you pay 25% tax. That means you'll need to work 10 hours to earn enough for those shoes. Doesn't seem such a great idea now, does it? But we all need treats and we all want things just because, so try this.

Give Yourself A Guilt Free Allowance

Move heaven and earth to ensure that you get your own spending money. Even if you're on a tight budget you still need some splash money. It's amazing how even $20 a week, that you can do whatever you like with, guilt free, can liberate you. Blow it every week on trashy magazines or pastries, or hide it away and save up for those shoes. The point is you get to choose. This will definitely help reduce debt as you'll have regular little guilt free splashes.

Create Additional Income

Now this is a great way to reduce debt. A part time job isn't always a necessity to get out of debt, but wow, it can certainly speed up the process. There's a multitude of part-time jobs available in the evenings or weekends that could power you towards your debt free goal, or you could look at doing something at home. I opted for an internet income as I wanted something that would allow me to visit my overseas family as often as I could. Again it's your choice.

Whatever you decide to do, do something. Take action as your debt situation is not going to fix itself. So ‘How To Reduce Debt' in a nutshell, stop making more of it and take control of the money you have got. Good Luck.