For some people, debt has become part and parcel of life. I have talked to so many people who think that it is ok to have a significant amount in their credit balance, pay a bit here and there, and then use the card yet again. While this kind of thinking may seem alright in the short term, you might just realise how damaging it is to your finances in the long run. Not only do interest charges and other fees add up to a considerable amount, but having debt for a long period of time also affects your credit rating.

So really, as the old adage goes, there is no time like now – especially when it comes to cutting your debt down. The year has barely started and it is a good time to plan out your debt reducing action before you fall into the habit of using those credit cards again and again, and yet again. So how do you go about it?

Sit down and set your goal
If you have £1000 in debt, ask yourself how much you want to pay off and in what period of time. If at all possible, you should really consider paying everything off within a reasonable amount of time. If not, then at least go more than halfway. Once you have decided on your goal, you can move on to the next step.

Analyse your spending habits
Cut down your spending to the bare minimum. What are the things that you can do without? New clothes every week? Exotic food items from the supermarket? Weekly nights out at the restaurant or pub? Magazine and newspaper subscriptions? Cigarettes? List down these things and cut them out.

Look for other ways to save on the essentials
As much as you may want to NOT spend, it simply is not possible. You have to pay for petrol for your car to go to work. However, you may want to consider taking your bicycle or the public transportation system instead. With regard to groceries, you may want to purchase non-branded items instead of the luxury brands that you have gotten used to. Maybe you can make your lunch instead of buying from the deli or the restaurant next door. Little things like these can add up and cutting back on them can also add up to saving more money which you can use to pay your debt.

DON’T procrastinate
You can sit down and plan all you want but if you do not take action NOW, you might very well find yourself sitting on your plan for the rest of the year. Do not be swayed by other “needs” and preferences. Remind yourself of your goal and how much you want to achieve that. Do not let yourself be distracted by other things, be single minded in saving more, spending less, and paying off your debt.

You might have gotten used to having debt as part of your life but you will never really realise just how good it feels to have NO DEBT at all.