by William Bond

Created on: November 29, 2009   Last Updated: November 30, 2009

Developing a debt free plan is an essential step to build a solid financial situation for you and your family. With millions of people who found themselves unemployed during the last two years, it was difficult to handle your monthly expenses with the funds from your employment checks. And there are added costs to start and continue your campaign on getting a job during the past two years. Many people needed to use their credit cards to be able to pay their current monthly bills, and now is the time to set up your plan to cut the credit card debt, and try to start savings for a new house or your retirement, or college fund for your children. I will offer you some simple tips to help you develop your debt cutting plan.

Review your last 6-9 months of checking accounts, credit cards records.

*These records will help you find out where the money is going in your financial life. Make a list of costs on your electricity and phone expenses, include the cell phone costs, credit card payments, rent or mortgage bills, cable, car payments, insurance for home and autos, and others. Ask the following questions when look at each bill: Do I need it? Can I get it cheaper with another vendor? Can I reduce it, or cut it out completely? Ask others in your family for help on items to cut? How much can you cut from you total budget doing this review. Let's say you can cut your total budget down by $200. That's a start, but now you want that $200 to help cut down debt..Every $l you cut from your expenses need to go directly on your debt payment.

Cut your daily expenses starting now.

*How much do you spend on a work day? Make a list of expenses to travel to work: meals, snacks, and gasoline. You find that it could be as much as $50-75 each day. Consider bringing your lunch, and coffee, and you could cut your costs by $20 a day, this is $l00 per work week,($20X5=$100). When you save $100 a week this is $5,200 a year(52weeksX$l00=$5,200). Take out books for free at your local library, rather then buy them at your bookstores, do your use your second or third car, perhaps you can sell it, and save on the monthly payment, and the cost of insurance on it. The savings can go towards your debt. Now let's pay off your debts each month.

Start with the cards with the highest finance costs.

*You will find the finance charge on your credit card statement, if not, call your credit card company, and ask them for the rate, they will give it to you. Once you find the 2 cards with highest interest

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