How to Eliminate Debt Without the Need to Consolidate Debt

Here’s a very informative debt elimination article I found on that talks about eliminating credit card debt without the need to consolidate your debts.  The article basically shows you how to get out of debt the old fashion way.

Thinking you might want to consolidate debt loans?  Need to put away your credit cards? There are good alternatives to debt consolidation. Unfortunately, just like W.C. Fields’ common sense cure for insomnia–get lots of sleep–many people offer equally simplistic advice about getting out of debt: just pay off your bills or consolidate debt loans (which only rearranges your debt and does nothing to pay it off.) It’s not that simple.

Getting into debt is easy. Getting out can be a struggle. We get into debt innocently enough. For some of us, we do so by design–to buy a new house or car or fund a coll ege education. For others, it is by accident–the transmission in the car fell out, the roof on the house fell in, or one of the household’s income earners was pink slipped. Then, of course, still others get into debt by mismanagement of finances–because they live beyond their means or just can’t resist taking advantage of every cent of available credit.

Here is a step by step way to get out of debt.


Stop accepting a minimum level of debt in your life. Many people have a comfort zone of acceptable debt. When the amount rises above some arbitrary figure, we cut back temporarily, only to resume normal spending later. That’s why some people carry thousands of dollars of credit card debt for years–paying a small fortune in interest each year–because it never occurs to them to pay it off, put away the plastic and start using cash.


Pinpoint your position. Excluding mortgage, determine how much you owe between cars, credit cards and other debt. At the same time, calculate how much discretionary income you have to begin whittling away at your debt load.


Map out your debt-elimination strategy complete with a Zero Debt Day to celebrate your freedom from debt. Base your plan on three factors: time, discretionary dollars and total debt.  For instance, if you owe $2,000 and can allocate $100 a month exclusively to debt reduction, you’ll be debt free in around two years, depending on interest.


Stop adding new debt. Too often, we pay off one bill, then pick up new debt in the process.


Adopt a cash-only policy, and put the credit cards away.  If money is tight, put off that new car for another year and put what would have been your monthly car payment to reduce your debts.


Don’t be too easy on yourself. Be willing to do what it takes to get out of debt ASAP. Consider this: If you allocate $500 a month to debt reduction, when you’re finally free and clear you’ll have $6,000 additional cash a year for lifestyle enhancement or to send ahead for retirement.


At the same time, avoid bread-and-water austerity. If you make yourself miserable, your plan will fail. Consider splitting discretionary cash in half–part for debt elimination; part for living (and playing) expenses.