It can be surprising how many folks out there have little to no idea how they got into so much debt let alone know what to do to reduce or eliminate their current state of debt. Thankfully, the answers are not hard to find. In fact, many of approaches to debt reduction are rather simple to put into practice. After all, what most people want is more control over their money and better financial security. Yet, most are bearing such a large debt load that there is little of either. Essentially, what you need are a few tips to get you started in the right direction towards renewed levels of financial freedom by debt reduction. Lower Your Spending This is your starting point. You need to get a handle on your spending habits. Identify all of the areas where you spend excess amounts and stop spending immediately. These are not necessary expenditures and consequently adding to your overall state of debt. Cut it down to the bare essentials. Stop eating out. Hold off on spending money on that new book, new pair of designer jeans, or a night out at the movies. These things can wait. There are alternatives to spending money that you shouldn't be or don't have. All of these daily expenditures can be reduced and should be until you have a handle on the situation. (Note: this goes for big purchases as well; if they can wait, then make them wait until you can afford to buy.) Know Your Debt Load Along with ceasing excess spending, you should begin compiling a list of all your known debt. Having a clear picture of your total debt load can be an eye-opening experience and can help you better understand what can be done to improve the situation. Make sure that you include everything known debt item in your list. This includes all of your monthly expenses, loans (secured and unsecured), credit cards, rent payments, mortgage payments, etc. Having all of this in writing and available for review will be a big help in the end and allow you to set financial goals. Set Goals For Financial Change It is always preferable to have a plan for achieving results. That is what setting financial goals is all about. The thing to remember about goal setting is that it must be kept reasonable and attainable, while still remaining something legitimate to strive for completion. With any major financial goal such as the elimination of a credit card payment or a loan, you should also break up the larger goal into smaller ones to keep it all manageable. Spending Records And Budgets You should also keep a record of where and how you spend your money each month so you have an idea of where you can make cutbacks. This helps you know where your money is going and so provides greater financial control. This allows you to establish a budget that includes all payments and expenses so you can plan things out better and keep the most control over your finances from that point on until you have eliminated the outstanding debt or significantly reduced it. About the author: Peter Kenny is a writer for The Thrifty Scot, please visit us at
