How to Get Out of Debt - and Stay Out of Debt

If you're struggling with debt, you may find yourself dreaming of the day when your finances will stop being a source of stress. That day will come a lot sooner if you stop dreaming and start working.

Here are some simple steps to getting yourself out of debt and keeping things that way.

• Start saving. It may seem crazy to start saving money when you owe a lot in debt, but it's a great first step. Paying yourself is as important as paying your lenders. Don't have a lot of extra cash? Start small by saving anywhere from $10-50 a month. As you pay your debt down, you can increase your monthly savings.

• Log your spending. Keep a notebook of every penny that you spend. Knowing exactly how much you're already spending will give you a good idea of what you need to budget. It'll also make you more aware of when you're spending money unnecessarily.

• Stop adding to your debt. Stop using your credit cards right now. Don't apply for any new credit. That includes debt for furniture, appliances, and electronics. If you're already feeling the weight of too much debt, the last thing you need to do is add to it. By disciplining yourself to stop spending money you don't have, you'll be able to keep yourself out of debt.

• Start paying off your cards. Begin getting yourself out of debt by paying off your credit cards. Choose the card with the lowest balance to pay off first. While paying the minimum payments on your other cards, pay all of your extra cash toward the card with the smallest balance.

When that card is paid off, apply that payment to the card with the next smallest balance. Continue this way until all the cards are paid off.

Be patient! It took you years to get into debt, and it may take years to get out. Stay on track, though, and you'll see the benefits.

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About the author:

Michael Torrance is a financial consultant with First American Debt Consolidation and Loans, a company specializing in debt consolidation loan alternatives through consumer credit counseling.