Maximize Strategies to Minimize Your Debt

Is debt slowly sucking the life out of you? Do you dread opening the mailbox or answering the phone for fear of hearing from creditors? Do visions of bankruptcy and foreclosure turn your dreams into nightmares? If so, you can fix your financial future fast by following a few sound debt relief strategies.

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Millions of Americans are struggling with debt. Total revolving nationwide credit card debt has skyrocketed to more than $683 billion. That's more than two-thirds of a trillion dollars! But it's not hopeless. By making a plan and sticking to it, you can rid yourself of the debt demons once and for all.

Step 1: Admit that you have a problem

It's time to get real. Debt crises are usually caused by one behavior and one behavior only: You simply spend more money than you have. Make a list of your monthly bills, complete with the amount you're currently paying and each outstanding balance. Once you've finished your list and surveyed the damage, breathe a sigh of relief. If you're committed to minimizing your debt, you'll never owe this much money again.

Step 2: Analyze your spending habits

Where is your money going? Are you eating out too much? Using credit cards when you could have used cash for things that you don't really need? Once you've answered these questions, you're ready to make a change.

Step 3: Cut the fat

Cancel the gym membership that you never use, and stop paying for newspapers and magazines that you don't read. Those small expenses really add up. Sacrificing them is a painless way to begin your journey towards a debt-free lifestyle.

Step 4: Make a plan

Review your debt and determine how much you can afford to pay each month in order to lower your outstanding balances. Pay off the smallest amounts first in order to create a snowball effect. You'll experience a real sense of accomplishment when that first bill disappears. Then you can use that money towards the next item on your list.

Step 5: Damage control

Don't avoid your creditors. If they think that you aren't serious about paying off your debt, they may intensify their collection efforts until you surrender. Be proactive and contact them first to confirm your new payment plan. Don't commit to a higher amount, however, since any slip-ups may be viewed as a failure to honor your agreement. They'll never complain if you send a higher amount than what you've promised.

Step 6: Get the scissors

It's nearly impossible to reduce your debt if you keep using credit. Select the card with the lowest interest rate, and save that one for emergencies only. Cut up the rest, and don't carry your emergency card with you. The inconvenience will force you to determine whether a true "emergency" actually exists.

Debt reduction can be daunting, but the rewards are life-changing. Stick to the plan that you've made, and your mailbox and telephone will welcome you back with open arms.

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