How to Create a Successful Debt Reduction Plan

November 27, 2012

If you are feeling overwhelmed by debt, and ready to get out of the situation, you need to create a plan to help guide your steps. A successful debt reduction plan can help you get rid of your debt a little sooner, saving you in interest charges, and helping you position yourself to build wealth (once the debt is paid off).


Creating a successful debt reduction plan requires careful thought. Here are some tips to help you improve the chances that your debt reduction plan will be successful:


Decide that You Truly Want to Get Out of Debt


The first step is to decide that you truly want to get out of debt. In order to make any debt reduction plan work, you need to be committed. Look at the reasons that you want to be out of debt, and recognize the advantages of financial freedom from debt bondage. Fix that determination in your mind before you get ready to move forward. When it is difficult to keep with your debt reduction plan, you can dig deep and remember all the reasons that you truly want to get out of debt.


It can also help to consider using debt consolidation Canada services, like those offered by Consolidated Credit, that help you make a plan to reduce your debt. This can be a solid commitment to help you take that first step to getting out of debt.


Figure Out How Much You Can Put Toward Debt Reduction


At first, you might be tempted to make sweeping statements as to how you will get rid of your debt and pay large amounts of money toward your goal each month. Realize, though, that you need to be realistic. You probably have other bills to pay, and other necessities. And, while you shouldn’t go crazy with the fun stuff, you also need to save room for small, inexpensive pleasures so it’s easier to stay on track.


Really look at your budget, and decide what’s realistic. You want to stretch a little for it, but you don’t want to be overwhelmed. Consider the things you can cut from your budget, as well as ways to make a little more money. Decide what you will put toward debt reduction each month, and create a new spending plan based around that. Make it a priority so that your debt reduction payment is one of the first things you take care of each month.


Look for Ways to Move Even Faster


Make a game of your debt reduction plan. Look for ways to accelerate your debt payments. Find ways, on top of your regular, planned payment, to speed things up. Add a little extra each month, either from finding a side gig, selling some items you don’t use anymore, or cutting out superfluous expenses. You can even get your family involved by having a competition to see who can find the best ways to get extra money for debt reduction. This can turn your debt reduction efforts into a fun activity, rather than a chore. Viewing your debt reduction as something desirable is important if you want to stay on track.


If you are committed, realistic, and willing to go the extra mile to see your debt reduced faster, you will be able to stick to your plan, and feel debt freedom faster.