Debt reduction requires determination, a realistic plan and possibly a willingness to get by with less for a while. The payoff is a more stable financial profile and less of your money going towards carrying costs every month. Simple habits maintained over time can add up to reformed spending patterns and continuing reduction of your debt.
Reduce Impulse Spending
Many debts are related to spending habits that are unplanned and impulsive. Train yourself to plan for spending and avoid buying things for yourself or others on a whim. You may find that the next day you don't even want the item anymore, and you've saved the money you would have spent on it.
Consolidate Credit Cards
Reduce the number of credit cards you have to one. Borrow money on your lowest interest credit card and use that money to pay off the others, then cut up those cards and close the accounts. Leave your one credit card at home and only take it out when it is needed.
Increase Mortgage Payments
Increase your monthly mortgage payments and/or make prepayments to reduce your principal more quickly. A mortgage that is paid off at the normal schedule will cost you many thousands of dollars in interest over the years. The more quickly you can pay it off, the more money you will have in the long run.
Make More Money
This step is easier said than done for most people, but it is definitely effective in reducing debt. If you are in a position to meet with success, ask your employer about a raise, or work more hours. Consider taking on another job and devoting all the money from it toward your debt.
Sell a Car
Selling a car gives you a large cash sum immediately, and removes the insurance, registration, gasoline and maintenance costs that you pay for it every year. If your household has more than one car, a bit of extra planning and coordination may be able to help you to cope with a single car.
Maintain a Budget
Gain control of your spending habits by maintaining constant awareness of how much money you are making and how much you are spending. Dedicate a notebook to keeping track of your budget over the long term. Consult the notebook periodically to identify spending patterns that you can reduce.
Downsize Your Home
Moving out of your house is a radical way to reduce your debt, but if your debt is debilitating, it can be very effective. Moving to a smaller home in a less expensive neighborhood that is cheaper to maintain can leave you with a financial windfall from your home sale which can be used to pay your debts.
Find Inexpensive Activities
Reform your leisure spending habits by developing interests that don't cost a lot of money. If you've been getting into debt by vacationing in Europe, try camping in nearby parks. Replace expensive restaurants with the pleasures of cooking at home.
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