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Debt is one of those topics we try our best to avoid or to explain away, but when the average household is carrying $132,086 in debt with over $15,000 of that amount being credit card debt, it is a conversation that needs to happen, as uncomfortable as it sounds.

Most of us want to control and reduce our debt load, but because of low-income growth rates and rising costs of living, debt can sometimes feel like an unattainable goal. However, by taking a few simple steps, you can start to get yourself set up for financial success.

  1. Spend Less and Become Addicted to Saving

We often aren’t acutely aware of what we spend. Taking some time to go through your purchase history can help you identify areas where you may be able to cut back. Make a list of the things that you must have, and a list of what you could spend less on. Then make it a focus to save rather than spend.

You don’t have to give up every optional item. By scaling back on a few luxury items, you can still buy things you enjoy but at the same time, still see your savings grow, and your debt shrink.

Also, consider a small regular transfer from your checking to savings. Create your budget without including the amount you move. It will help you save and as you see the amount in your savings increase you, will be less tempted to spend it.

  1. Increase the Amount You Pay

Even if it is only by a few dollars, paying more than the minimum can help you to pay your debt off more quickly. Review the amount of interest you pay for each debt you have. Then, evaluate the interest your savings account is earning. It may be a better idea to pay more on debts that have high-interest rates with the money in your savings account. It may feel painful at first but when you see your debt decrease, it will be worth it.

  1. Reduce Your Credit Card Debt

It can become easy to rely on your credit cards to help you out if you need to pay other bills. But at the same time, it can also make it harder to save especially when you are paying high-interest rates. So how can you manage your finances while reducing your credit card debt and increasing the amount you can save?

Start by reviewing your statements. Know how much interest you currently have. While paying more on your cards as suggested previously can help lower the overall amount of your debt, go the extra mile by stopping the use of your credit card completely. This way, you stop your credit card debts from increasing.

When you rely on your credit cards to help pay other debts, it is often a hard habit to break. However, when you see your payments become lower, you’ll have more money in your bank account and you’ll be able to see the value of using your cards less often.

If you have more debt than you can currently manage on your own, you may want to consider participating in a debt relief program. Debt settlement is one example of these programs  where the balances are negotiated on instead of focusing of adjusting interest rates and late fees.  It can help you pay off your debt at a reduced amount and in a shorter amount of time. Check CuraDebt, one of the leading debt relief companies available. They give out free no obligation consultations for people in debt. You can see numerous CuraDebt reviews online about how good their services are.

  1. Manage Your Credit Score

When you are behind on payments, your credit score is the last thing you want to see. However, it’s really the starting point of you taking control of your finances. Knowing what you need to do to improve your score is critical as you work to get your debt under control.

Start paying your bills on time. This contributes to more than a third of your overall credit score. Next, reduce your debt load by using credit cards less often and resist the temptation to open additional cards.

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  1. Prepare for the Future

When you are young, retirement isn’t really something you think about right away. Keep in mind that retirement is becoming more and more expensive. Unless you want to work until you are in your sixties, you should start planning for today.

The first and easiest way to take charge of your future is to participate in your employer sponsored saving plans. Plans that include a match up to a certain percentage of your contribution means you are getting free money for your retirement. Even if you can only contribute enough to meet the matching percentage, it’s still worth it.

In addition to preparing for retirement, you should also prepare for the unknown. Emergencies happen, and they often happen when we aren’t emotionally or financially prepared for them. Creating a savings account for emergencies can protect you and your family from the unexpected.

It can be hard to admit that you aren’t in control of your financial situation. Take comfort in the fact that you aren’t alone.  Debt and credit management is a struggle for a lot of people. While you cannot erase your debt overnight, you can take steps that put you in charge of your money.

Final Thoughts

Taking time at least a few times a week to review your financial situation can help you plan for your future and while it may take some time before you see results, your dedication and patience will be rewarded. Reducing debt and increasing the amount you are saving won’t be easy at first. But when you can pay off your debts for good or put a downpayment on your first house, it will be well worth the sacrifices made.

Sources:

http://www.curadebt.com/curadebt-com-curadebt-reviews-fees-complaints

http://www.youtube.com/watch?v=KL5kmdyW5xc

http://vimeo.com/curadebtreviews