by Paul Lalley

Created on: July 15, 2008   Last Updated: November 06, 2011

Tired of getting calls from collection agencies? Or those letters that make you jittery just opening the mailbox? Owing money takes a lot of fun out of life, something you probably already know. But you can take control of your money and your life. It'll sting a little, but it'll be a whole lot better than cringing each time the phone rings.

You can't borrow your way out of debt. Debt consolidation companies cost you money. You may not feel it but they're making money off of each consumer who uses their services. In effect, using these agencies is actually borrowing more and digging yourself even deeper in to debt.

There's nothing these companies can do for you that you can't do yourself. And when you do it, it won't cost you a dime. Getting out of debt isn't rocket science. It's common sense.

Same with a second mortgage or a credit line on your house. You get a second mortgage, clean up all outstanding debts and make two mortgage payments instead of one. No problem, right?

Nope, there's a problem. Your credit cards are all paid off now and, if you go back to your bad old ways, those credit cards will be maxed out again (give it 12 months) AND you now have two mortgage payments.

Get it? You can't borrow your way out of debt. Plain and simple.

Run your credit cards through the shredder. Plastic is addictive. The average American carries 5.6 credit cards: gas cards, store cards, MasterCard, Visa. Hey, what's in your wallet? If it's more than one credit card, start shredding.

Keep one card for emergencies. There are times when putting it on plastic is the only option. Cut up all the rest even the ones you don't use much. You have to go "cold turkey" on this one but remember those dinnertime telephone calls. That will keep you strong.

Live on a cash basis. If you can't pay cash, you don't buy it. Think that's too hard? Ring, ring.

Pay yourself first. The first check you write each payday is made out to you. Whatever you can afford even if it's five or ten bucks. Put it in a money market account and start to see the rewards of your self-discipline.

Pay off high-interest debt first and fast. Some types of debt are more expensive than others. Credit card interest can run as high as 29.99% if you're one day late with a single payment. Check your next statement to see what rates you're paying on which cards.

Never send the minimum payment. General rule of thumb, pay double the minimum payment at least. Told you it was going to sting but with each dollar you pay off,

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