by Leann Zotis

Created on: July 09, 2010   Last Updated: July 11, 2010

One of the more stressful situations to cope with in life is the feeling that comes along with debt and the sinking belief that you will never get ahead no matter how hard you try.  Debt is much easier to create than it is to overcome.  Undoubtedly, the best scenario is never to end up owing more than you can comfortably afford to pay off; however, reality is often somewhat less optimistic than the best case scenario.

Whether you are already dealing with debt or are simply anxious to find ways to avoid falling into that unwelcome position, there are several simple strategies you can employ that will put you on solid financial ground:

1)       Pay yourself first when your paycheck arrives.  Automatic withdrawals from your paycheck will guarantee that you put something away out of each pay.  What you don't see you won't miss.  Don’t wait to see what’s left over after you spend money on everything you want or need.  If you do that, most often you will run out of money before you run out of wants and needs.  Savings are the backbone of a healthy financial life.

2)      Create an emergency fund separate from your savings.  This should ideally be between three and six months of living expenses.  Don’t worry if you aren’t there yet.  Start today.  Steady progress will pay off.

3)      Get rid of those credit card balances.  If you carry several balances, target the one with the highest interest rate and focus on paying extra towards that balance every month.  Once you have paid off the highest interest rate balance, use the money you were paying towards that credit card and attack the credit card with the next highest interest rate.  Keep with this program until you have wiped out your credit card debt.

4)      While you are working on the previous step and especially after you have accomplished it, cut up all but one of your credit cards.  This one should be used only for emergencies.  Learn to spend with cash or not at all.   You’ll be amazed how much less you will purchase when you actually see your hard earned cash being turned over for a purchase.

5)      Stay current with your bills.  Pay each bill as soon as it arrives or set up payments for automatic deductions.  A forgotten bill can lead to service charges

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