by William Bond

Created on: January 06, 2010   Last Updated: January 07, 2010

Become a financial manager of your debt management, by trying to use your credit cards less, and establishing a workable plan to "Cut your debt on the bone" in the new year.  Debt management means monitoring your budget, and looking at both your needs, the bills you need to pay monthly, and cutting the wants, the nice things you want to make your life easier, such as a new car, and clothing or concert tickets.  Focus on your needs and then your debt balance can be reduced to a workable amount.  I will offer you some tips to watch your debt level and ideally pay off all your debt this year.

Review your budget fully.

Write up a new budget and first off include in it your needs for the month including:  rent or mortgage payments, credit card payments, utility bills, taxes, food, insurance, and others, essentials, count them up.  These are paid first each month before any other wants in the potential.  While doing your budget, you notice that you are only paying the minimum on your credit cards, and you are not paying them down.  What can you do?  You can put and extra $l00 in your budget to pay down the credit cards this year, this is $l00 on the credit card each month, $l,200 a year(l2X$l00=$l,200).  Watch your income amount, is it enough each month?

Watch your income regularly.

How much do you earn each month? Consider your net pay, not your gross pay, and how much is left over in your checking account once the bills of the month are paid.  This is crucial to being able to handle your debts, and a sure sign of danger if you have an emergency car repair, or medical or dental work needed this year, or repairs needed at home. Try to start a savings account, and title it "Emergency Fund" and put $l,500 to $2,000 for unexpected expenses, that you need to pay, and you cannot increase your credit cards debt, or take a personal loan to pay it. This will only increase your debt. Set a goal to pay off your credit cards, so you can pay them off each month, and have a zero balance all year around.

Cut your credit card balances to zero.

Nothing helps your budget and cash flow more than cutting the credit cards to zero.  If you can pay them down to zero, then you can take the extra money and fund your 40l(k) contribution at work, from a 5% a week to a l0% a week contribution.  You will begin to see your retirement plan build up and up.  You can use it to fund

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