Money Management - Debt Reduction

Perhaps one of your New Year's goals is to get on track with your finances, and begin to develop a much more financially healthy lifestyle. This is actually a very common New Year's Resolution, but not one that everyone sticks with. The reasons for this are plentiful- but it boils down to a couple of things. Debt is easy to wrack up, hard to get rid of- and when you have existing expenses that have to be paid, sometimes it is easy to get behind. Not just sometimes, most of the time, actually. People find that they get into debt and then, just can't seem to get back out, but, with a little budgeting, planning and the right attitude, it can be a bit less of a struggle.

First off, you're going to have to face the sum total of everything you need to pay off. Both in terms of debt, and in terms of monthly expenses. This is the hardest part of the entire money management plan- because it can be absolutely discouraging. However, whoever you are, wherever you are, you can bet there is someone out there, probably many people out there who have had much worse debt than you do, and have managed to get out of that. So bear in mind as you look at your list- this is just everything. What you're really going to do is break this huge mountain of a goal down into smaller goals- goals that will be much more easy to not only focus on, but reach so that you also build your confidence in being able to take on the entire thing, just a bit at a time.

The second thing, get control of your in the now spending with a budget. Once you do have that in gear, you have a much clearer picture of what you can do about the debt problem. If you've got a budget, it usually begins with tracking where your money goes- the areas that you can cut back on, do. Pare it down to essentials and the occasional break. It's important that you not completely cut out recreational fun- but you may want to find cheaper ways to get that relaxation in, if you can. Now that you've done that, it's time to make some calls.

Starting with the debts that have a 15 percent interest rate or more- call them and negotiate a lower one. This is what a credit management firm would do- but it's also something that you can do. If you cannot get them to lower and you can manage a transfer offer? Do so. If not, you might consider making this your first goal, if you feel you can tackle that one right away. One way or another, you'll take care of this debt.

These are the very first steps to taking back control over your money. It may be a long journey, but it is definitely one that is worth your time and energy- and more than that, it's one that is certainly possible for you.