As DMB clients bring closure to their debt settlement programs and move to the next chapter in their lives, many will begin the arduous task of, once again, juggling debt. The trick is keeping it in check.

Don’t avoid the B-word

The best way to start reducing debt is to set up a budget. It’s not a punishment; it’s a way of knowing exactly where your money goes. You’ll simply need to add up your income and subtract your expenses, then set up a plan.

But don’t lie to yourself. Be honest about your spending habits and you’ll end up with a more realistic budget. You can find a good article about budgeting on DMB’s web site under Tools & Resources / Articles of Interest.

What’s your plan?

Use your budget to help you plan your debt-reduction/management strategy. List all of your debts, from the highest interest rate to the lowest. Aggressively pay down the highest-rate balances while making on-time minimum payments on the others. Your budget will dictate how much you can dedicate to paying down your balances each month.

Here are some other tips:

• Consider using savings to pay off debt.
• Use extra cash—bonuses, extra paychecks, winnings—to pay down debts.
• Volunteer to work overtime, or get a second job.
• If you can’t earn more money, you’ll need to spend less, it’s that simple.

Face up to your credit cards

Once you’re out of debt, how can you stay that way? Of course, stick to your budget. In addition, figure out how to deal with credit cards, which most likely got you into this mess in the first place. Cut up all but one of your cards, the one with the lowest interest rate. Use that card only for emergencies and start using a “debit card”. If you do continue to use your credit cards, pay the balance in full every month and avoid interest charges. Lastly, don’t be tempted by sale items you don’t need.

DMB Financial encourages its clients to embrace those disciplines that will help them avoid the pitfalls of accumulating unmanageable levels of debt in their lives. However, whatever you do, don’t give up. Remember, you didn’t get into debt overnight. Getting out of debt takes time and patience, but the rewards are well worth it down the road.

Related Posts:

1. Your Five Minute Guide to Banking
2. Controlling debt
3. How to Avoid More Debt
4. Financial Literate? Not According to Study…
5. The Ultimate Debt Relief Guide – Reviewed