For many, the decision to get out of debt is preceded by weeks, months or possibly years of worry about these obligations. But it’s important to know that getting rid of debt can actually start with some very small steps and strategies that you can begin today.

Advice is a good first step. A meeting with a financial planner can help you investigate all sources of income and total up all your obligations — most will make you bring all your bills with you — and tailor a plan that matches your needs and circumstances. But in general terms, here are 10 steps you should follow:

  1. Get a grip on the amount of debt you have: You can’t overcome a debt problem without knowing how much you owe. Start pulling together every bill with a balance where you’re charged non-tax-deductible interest — credit cards and auto loans for a start — and get a total. If you’ve missed any payments on any of these balances, bring those current first. Then organize the rest of the debt with interest rates and set a payment order that attacks your highest rate balances first. Also, this is a good time to check your credit reports to make sure there are no other surprises in your credit picture. You are entitled to three free credit reports each year on Any other credit report with the word “free” in its name that asks for a credit card number will likely charge you — avoid those.
  2. Put the credit cards away: Cut up your cards if you have to, but at the very least, put them in a safe place where they’re far away from your wallet and your phone or computer (so you don’t use them for catalog or web orders). Once your debt is paid off, then you can consider which accounts you will use — sparingly — in the future. 
  3. Now get a grip on spending: It’s time to make a budget. For a month, start tracking your spending — every dime. You can do this on paper or on a computer-based solution like Quicken or As you go through the numbers weekly, start identifying things you can live without — coffee and doughnuts, expensive lunches (carryout is a huge budget-buster) and any other frills that can be cut or eliminated. Once you start to suspect that a particular spending item isn’t absolutely essential, cut them immediately — don’t wait for the end of the month. When you get to the end of the month, build a spending plan that covers the essentials and then direct any additional savings you’ve identified toward paying off the debt. 
  4. Try to refinance your home debt: If you have not recently refinanced your mortgage or home equity debt, see if there’s an opportunity to do so while rates are still low. You’ll need at least 10 percent equity in your home and a credit score exceeding 740 to qualify for the best rates, but start negotiating with your current lender first and see how well you do.
  5. Try to refinance your credit card debt: If you are facing an overwhelming amount of credit card debt, talk to each credit card company directly to see if you can lower rates or monthly payment amounts. Don’t fall for the 2:00 a.m. come-ons from debt resolution companies — they generally charge high fees and take the payment process out of your hands, which may mean late or missed payments. It’s not easy to negotiate a better deal and you may need to insist to speak with several supervisors. But if you succeed at getting a more favorable deal, it’s better if you keep the payment process in your hands so you can keep a constant eye on how your situation is improving. 
  6. If you need outside help, use some smarts: The Credit Card Act that took effect in February 2010 requires credit card issuers to print a toll-free number for a nonprofit credit counseling service on every bill. It’s important to know that the credit card companies fund these nonprofits, so they’re not acting completely in your interest. Nor are they foolproof in making sure bills get paid on time — any time you let someone else handle your finances you face that risk. But if you are looking for outside assistance and negotiation with your balances, these agencies are a better option than those credit-repair agencies you’ll see advertised on TV. Yet a financial planner may be able to offer specific negotiation tips that can help you keep better control of your debt issues. 
  7. Learn to use cash or debit: Try to migrate as much spending as you can to cash as long as you get receipts that help you track that spending. A more efficient solution — particularly if you download your bank transactions into a financial tracking computer program — is the debit card. Debit cards wearing a bankcard logo are typically welcome at most stores where credit cards are accepted. This way, you pay cash without carrying cash. If you don’t have such a card, you can probably get one from your bank to replace your traditional ATM card. But remember to tell them to limit your buying power on the card to only what you have in your account. And use overdraft protection to avoid fees.
  8. If you can do it safely, do it yourself: You don’t have to pay for a hand car wash or a lawn service if you can do such things yourself. For any home or auto maintenance chores you may have during the year, learn as much as you can about those tasks and how much skill, money and time it takes to do them. Previous generations made do-it-yourself a necessity. See if that option is right for you and you might save a considerable amount of money doing it. Also, for bigger jobs, pair up with friends and family and help each other save money. 
  9. Plan your shopping in advance: Impulse buying had its own role in the debt crisis. It’s time to stamp it out at least until your debt issues are fully under control. Start making a centralized list of necessary shopping items — keep the list for grocery, discount store and other locations on one page so you can see everything you’re considering. Mark off what seems less than necessary. Use coupons and other discounts — the same goes for online purchases. Always do a search for coupon and discount codes to save money on shipping and overall purchase price. Oh, and when you can, buy used — recycled clothes, furniture and home goods will save you money, and if you’re making smart purchases, no one will care. Again, direct all savings toward debt.
  10. At the end of the rainbow, don’t restart the problem: Once the slate is clean, don’t start spending again. Start saving and investing.

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