Clearing your consumer debt can lift a huge burden off your shoulders. Creditors require monthly payments and, if you have a large amount of debt, you may spend a huge percentage of your monthly income paying down bills. Eliminate your debt to reduce your monthly expenses and start saving.
Changing Your Spending Habits
You can't eliminate your debt without first altering the way you manage your money. Buying items that you don't need can play a role in huge debts--especially if you do not have the money. Credit cards are practical but if you're not careful, you can easily accumulate thousands of dollars in bills. Use credit cards as a last resort, and only during emergencies. If you must pull out your cards to make a purchase, make sure you're able to pay off the balance within a month.
Set Personal Goals
Setting your expectations too high or giving yourself unrealistic goals can hinder your efforts to get rid of debt. You didn't accumulate bills overnight, so don't expect to pay off your balances overnight. Debt elimination is a process. Unless you're able to write a check to get rid of balances, prepare to spend the next months or years paying down balances. Based on your disposable income after paying your monthly expenses, establish a payoff goal or date. For example, if you have $5,000 in credit card debt with a disposable income of $250 each month, you could eliminate this debt in 20 months.
De-clutter and Make Money
Going through your closet or garage can reveal material possessions or belongings that you no longer use or need. Rather than throw these items away or donate them, plan a yard sale or take these items to a consignment shop to earn extra cash. Old furniture, clothing, jewelry and electronics can provide you with extra money to pay down some of your debts.
Use Your Spare Time
Everyone's situation varies, and some people don't have items to sell or extra income to pay down debts. There are two ways to deal with this situation. You can either accept debt and continue to make small minimum payments for the next 20 or so years, or you can be proactive and create additional income. Many employers seek part-time help on nights and weekends. Working an additional 10 o 15 hours a week could possibly increase your income by $100 or more each week. Apply extra money from your part-time job to debts.
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