Simple steps to help reduce your debt

Are you flexing your credit card, and not paying off the balance in full each month? If so, you should start reducing your credit card charges each month. This is an awful event to experience if you are not paying off your credit card charges, since you may be making your financial situation worse. If you have uncontrollable spending issues, you will need to address them before you start reducing your debt each month in addition to taking these 4 steps.

• The first step is to create a list of your income and your expenses. These things include your food, your shelter, your utilities, your clothing, and insurance. If you do not make enough to cover these basic expenses, then you must increase your income. You may need to look at your housing costs to see if your house payment is taking up more than 25% - 28% of your income. If it is you may need to consider moving.

• Next, create a monthly budget. This step is important because you can track where your money is going. It helps you to track your spending, so that you can find your trouble areas, and improve your spending habits. It also prevents you from running out of money before your next pay period. You may want to change to a cash-only system if you are having problems sticking to your limits. Your budget should be able to cover all of your expenses that are needed and then you cut back on the things that you want until you are no longer overspending each month.

•  Find extra money to apply to your current debt. Surely, you can cut back on your cable and phone plan or cancel your personal trainer gym cost. This will help take care of this debt. Make sure that you are including luxuries when you work on cutting expenses. You may want to sell some items to reduce your debt. The more money you can find or raise the sooner you will be out of debt. A debt payment plan will make it easier to pay off the expenses, it allows you to direct your payments to just one debt at a time.

• Once you have successfully completed steps 1 thru 4 start to save up an emergency fund of three to five months of income so that you will not go into debt when an emergency arises.

Key Reminders:

1. The first step is to create a list of your income and your expenses.
2. Create a monthly budget.
3. Find extra money to apply to your current debt.
4. Save for emergency expense.

These 4 steps will get you well on your way to reducing your debt each month. I would love to read your thoughts.

I hope these cool ideas will help you to achieve your goal!