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For some, debt is a way of life. Two car payments, a mortgage payment, and several credit card payments comprise a majority of their monthly expenditures. But, is debt good or is the borrower a slave to the lender? It has been said that 7 out of 10 Americans live paycheck to paycheck. Whether or not the statistics validate such a high number, it is common knowledge that for many of us the month is far longer than the money. For those who feel like slaves and for whom debt is definitely not a good thing, here are some simple steps to take, which, if followed, will cause that anchor weight of debt to be eliminated.

First, stop borrowing money. Cut up the credit cards and close the home equity loan. Stop frequenting the payday loan store. The borrowed dollar is like a leak in your financial balloon. Until you plug it up, you cannot make good use of the best tool you have for building wealth, your income.

Second, start an emergency cash fund. As quickly as possible, save $500 to $1000 to be used for emergencies only. You cannot use a credit card for this purpose because you tore them all up in step one. Having cash on hand for emergencies will not only help you to resist the temptation to borrow money but it will also provide some peace of mind.

Next, get on a budget. The goal is to ensure that your income is not exceeded by your expenses. Put together a monthly spending plan and spend each dollar on paper first. Stick to the budget no matter what. If a great opportunity comes along to buy that lovely fleece sweater on sale or to purchase a brand new, super-slick, ultra-light hang glider but the money is not in the budget, don't do it. Stick to the plan.

Then, pay down your debts. List your debts from smallest to greatest. Pay minimum amounts on all of them expect the smallest one. For that one, throw everything at it until it is paid off. Once that one is eliminated, go after the rest of them the same way until they are all paid off. Passion is important here. A lackadaisical attempt will only prolong the time it takes to be debt free. If your budget does not have room for extra debt payments then seek ways to increase your income. Work over-time. Get an extra job. Sell stuff. Do something to increase your monthly income and apply every spare dollar to your debt. You will be surprised at how quickly your debt will be reduced when you are passionate about its demise.

As part of the plan to pay down your debts, do not succumb to the temptation to consolidate your debts. This accomplishes nothing more than moving your debt around. Refinancing your home to "pay off debts" merely hides the debt in your house payment and robs you of valuable home equity. Do not fall into this trap. Simply pay those debts from smallest to largest and watch that ball of debt shrink.

Finally, and most importantly, hate your debt with a passion. This is no time to treat debt like a favorite pet or a long, lost loved one. Hate it with everything you can muster. Consider it a mold that is contaminating your home. The sooner you kill it the healthier your life will be. It is not to be regarded as an integral part of your financial portfolio but, instead, as a pariah. Cast it out and let nothing stand in your way. By following these steps you can free yourself from the clutches of even the most egregious financial problems. Start today and don't stop until you are completely debt free.

Learn more about this author, Bret Roberts.
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