How to reduce/eliminate debt: advice that really works
Locating good debt reduction advice may end up being somewhat confusing for you if you want to lower how much personal debt you have. Too much of the available info makes it seem like it's nearly impossible. Then you have those places who pretend their advice will help you get out of debt, but it's actually designed to make stay in debt longer. There are also those who expect you to live on practically nothing. While most of them mean well, the truth is that they may not be good options for your current situation. That being said, the following advice will be able to help you get out of debt, regardless of which specific method you end up using.
The first thing you need to do is find out exactly where you stand financially. Start a spreadsheet or get a sheet of paper and write down all of your debts. Include every company and person you owe money to, including car payments, mortgage, personal loans, credit card balances, student loans and any bills that are past due. Next to each creditor, write down the total amount you owe, the minimum monthly payment, and the interest rate you are being charged.
Once the list is done, add up the totals in all but the interest rate column. You will now see the total amount of debt you currently owe, as well as the total minimum monthly payments you're expected to make. The totals will probably shock you, but it's important debt reduction advice because it shows you a realistic picture of how much debt you have.
The next step is to figure out how much money you have coming in and how much you are spending. Make a list of all of the income you have coming in on a regular basis, as well as any money you could easily get your hands on if you had to (but don't touch any retirement savings). This gives you a better idea of how much you will be able to apply toward your debt, but there's one more step...
You need to also write down all of your expenses. Don't leave anything out. The more honest and accurate you are, the better. Once you see where all the money is going, you can start to see areas where you should be able to cut expenses.
The final bit of debt reduction advice is to put all of this data together to start reducing your debt. Free up as much money as you can and apply as much of it as you can toward the debt with the smallest balance (while paying the minimum amount on all others). With luck, you may even be able to pay it off right away. Each time you move on to the next debt, rollover the amount you were paying on the previous one. Keep doing this and you will be out of debt faster than you can imagine.