Debt is one of the most dreaded words, and one which is inevitable given money is essentially printed with debt already attached. With the financial system being negotiated by debt, it is difficult to live a full life without choosing to get a loan or run up debt on credit cards to help you afford a life of luxury.

Well, using the simple tips in this article you can reduce your debt levels, but still live the life you wish to lead. If people realized they could live a life with all the luxuries and half the debt, I’m quite sure they’d choose to live that life. The tips will help you get out of debt if you are currently in this position, or alternatively help you stay out of debt if you are currently debt free.

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1. Don’t increase your debt further
This point is a very simple one, but should be followed in order to ensure you don’t run up further debts. The worst position to be in is running up more debts in an attempt to recover previous or current debts, since understandably this will just get you into more debt. If you have more than one credit card then cut the others up and keep just the one for emergencies. If used sensibly credit cards can be financially advantageous, but only for situations where you are certain you can repay, and have done some planning to help get your spending under control, with an understanding of the problems you can facefollow if you don’t pay.

2. Record your Spending
This is a critical step to monitor how much you are spending. If you are unaware of how much money you are spending on what, then you could well be spending beyond your means. It is important to gauge how much your outgoings are each month, in order to determine whether you can afford to spend this much based on how much you earn. If your outgoings are greater than your incoming money, then you are certainly building a cycle of debt. Take heed in removing unnecessary items and spending less on items you are accustomed to buying.

3. Write a Budget
Preparing a personal finance plan  including how much you spent last month, provides a great gauge for future, signaling areas where you can reduce spending. https://www.mint.com/ is a great tool for this.

4. Figure Out How Much you Owe
Often debt is viewed as ongoing without people ever getting a hold on how much they owe. By finding out everything you owe and writing it down, you will finally get a clear picture of how much you are in arrears. Realising how much you owe, you have a number to aim at, and can configure other expenses and savings in response to your new findings, helping you manage your moneyfollow.

5. Start Paying off your Debts
Based on how much you earn, how much you are in debt and your monthly expenses, you can figure out an amount to pay off your debts by each month. This is a figure which has come out of reducing some of your current expenses, and potentially even taking on more work to pay off your debts. Once you have figured out a realistic amount to pay back each month, you’re right on track to clearing your debts. It will feel good knowing you have made real steps, but remember to keep financially planning in order to budget your spending and ensure you have enough money to maintain debt repayments.

Hopefully this post will help with your debt problems.