How to get rid of debt?

This is probably one of the questions 90% of the so-called civilized world inhabitants ask themselves. There are no right or wrong answers, however, as each of us should first sit down and analyze why did we get into debt is the first place.

If you are not in this category, then congratulations, you are living a less stressful life than we others do. If you belong to our group, then you should find out that debt management is not so much of a rocket science, but rather a program and a promise to yourself of not spending more than you afford.

One of the debt relief solutions is to consolidate, but all "/Persona l Finance">personal finance specialists and advisers would surely tell you that's only a temporary solution that treats the symptoms but doesn't cure the disease in itself. The only real, true debt relief is managing to pay off all your debt obligations. This is a tough one, especially thinking that our culture is based on taking loans for all kind of things such as studies, commodities or services. We are educated to seek for the best student loans in order to afford a college. Then we have to go in even bigger debt and consolidate, in order to get rid of the student debt accumulated over the study years. Freshly graduating persons won't always find the best paid jobs, as they have to accumulate some experience on the job before pretending bigger payouts.

This is a step by step guide of debt management, written from my personal experience with debt. I'm not fully debt-free yet, but I'm heading towards my goal with full speed. First of all, the main rules of living to get out of debt:

  1. Make more money than you spend to keep yourself free of debt.
  • This is the golden rule of a life free of financial stress. It is like a lever that works two ways: you can either cut your expenditure or earn more money.
  • You don't need to waste a lot of time in order to realize whether or not you are spending more than you make. The first time you hand out your credit card to pay for something like a water ionizer or other expensive device you don't really need, you should see it as an early warning and an alarm signal that you're going into debt.
  • If you can't cover the basics of living, then you need to focus on finding alternative solutions to generate more income. The discussion could go deeper here, because if your basic needs include driving the latest model of BMW, eating out two times a day and going to the hairdresser twice a week, you may want to re-evaluate what your real basic needs are, if you want to stay on the same level of income.
  • If you really can't give up your living standard, then simply go out there are earn more money. You could, for instance, learn how to make money online with working two-three hours a day and double over the weekends. Or you could submit your resume to recruiting and human resources companies and offer your services within your area of expertise. If you don't know anything in depth, then go back to school: learn a new skill, practice it for free or for very low money for a while, and when you get to know the tricks of the trade, charge more for your services.
  • If you can't afford it, don't buy it. Some of you may argue that you absolutely must buy certain things, even if you can't afford them, so going into debt is imminent. But what would you have done if there were no credit cards invented yet? Probably you would have suffered in silence and refuse yourself that purchase.
  • Get several price quotes before you buy expensive items or services. Try to think out of the box: if your washing machine got broken and needs replacement, don't go into the nearby store and order a new one. Look through current promotions. Usually, when a new hypermarket opens, they try to attract buyers with lots of promotional offers that could go down to 50% of the product price.
  • Generic products aren't always low quality. This is arguable and it doesn't apply for all categories of stuff. However, there are cases when you can safely go generic without a cut on quality. Nonetheless, don't go too cheap of razor blades, toilet paper or face creams, because you may end up spending more to repair the damage. Getting out of debt doesn't mean killing yourself with scratchy toilet paper.
  • If it's new and trendy, it doesn't necessarily mean I have to buy it. Do you like to be trendy? Does it feel good to buy the latest Coach bags and drive a cool car? Isn't it enough you've spent so much on a new iPad, do you now have to look into the most expensive iPad cases and other accessories? If you can't live without such things, move your body and make more money in order to afford them. Otherwise, you'll see that there is life outside brand names, too. And there's public transportation, and there are bicycles, and there are cheap used cars. You won't die by giving up a lifestyle that you can't financially support. Believe me, I've been there and I'm still alive.
  • After you've got used that you'd have to educate yourself living by these rules, here's the guide to get rid of debt:

    1. Credit card debt is the first one you should get rid of. Credit cards have the highest interest rates out of all types of debt instruments, except from payday loans, which are a different topic and which you should stay away from as hard as you can. Don't use your credit card to pay for anything, if you know that you won't be able to put the money back within the 0% interest period of 15-50 days or whatever your credit cards may offer.
    2. Unsecured debt relief is your second priority in debt management. Depending on how big your loan was, you may not be able to liquidate it as quickly as you'd wish.
    3. Mortgages will be probably impossible to get rid of on short term, but if you get yourself free of other debt categories with much higher interest rates, you'll have to adjust your lifestyle and earnings in order to cope with this long term debt.
    4. Don't accumulate more credit. If you consolidate, do it for getting better conditions, better interest rates or lower payments, but not for spending more.

    No matter what we do for a living, we are all managers. We have to manage our own lives, and it's up to us how we succeed or how we fail at being in charge with this empire which is our living being. Next time you're salivating over the new PS3 slim games console, balance having it with being miserable for living in debt and see for yourself if you still want to get it.

    Spoiling yourself can come with a too big price tag sometimes, so if you want to learn how to get rid of debt, learn first how to spoil yourself with affordable things.