Subscribe -- FREE!
Shel Horowitz's monthly Clean and Green Newsletter
Receive these exciting bonuses: Seven Tips to Gain Marketing Traction as a Green Guerrilla plus Seven Weeks to a Greener Business
( Privacy Policy )

10 Steps Toward a Debt-Free New Year

Have you examined your family finances lately? Are you shocked and anxious about the amount of debt you have? If your New Year's resolutions include getting out of debt or getting your financial house in order, here are ten easy steps for regaining financial control in the New Year:

1) Seek help. If you're not sure how to proceed, or you're feeling too overwhelmed to act for yourself, call a non-profit credit-counseling program for advice and assistance in working with your creditors to set up a repayment plan. Consumer Credit Counseling Service has offices throughout the US. Call 1-800-388-CCCS, 24 hours a day, for an office near you. You can also find information about debt problems from your local church, library or bank. Look for information online as well.

2) Contact your creditors. As soon as you're aware you won't be able to make a payment, contact your creditors. Creditors are more likely to work with you if they're contacted before the payment is actually overdue. Debt collectors are trained to solve payment problems, so don't be afraid to be honest with them about your financial situation. Stay calm. If you commit to paying the bill by a certain date, be sure you follow through on that commitment. The creditor won't be likely to work with you again if you don't keep your pay- ment promises. If you can't make your minimum monthly payments, write to each creditor individually and see if you can work out smaller regular monthly bills. Be sure to explain to them why you fell behind in your bills, your current income, your other financial obligations and the exact amount you can pay them each month.

3) Cut up all credit cards and send them back to the issuing companies immediately. Officially close all credit accounts. A temptation when you start seeing lower balances on your accounts could lead you to charge the credit limits right back up again if the accounts remain open. Don't take out more loans or open any new credit accounts until back bills are paid in full.

4) Set a frugal budget and live within it. It's usually easier to decrease spending than increase income. Don't make any purchases above and beyond the absolute basics until you've made some headway in catching up on your back bills. Consider selling assets to find more money for your debt repayment. Even holding a large garage sale can sometimes generate enough money to help pay an immediate bill or two.

5) Prioritize debts. Mortgages, child support and any debts that have gone to a collection agency are a priority. After you've identified the first priority debts, look for the credit companies that are charging you the most interest.

6) Pay each creditor something. No matter how small the amount you're able to pay, it will show good faith on your part as you try to negotiate payment arrangements.

7) Track personal spending. It's important to identify any holes where your money is draining out. Keep a detailed record of every expenditure for one month, no matter how insignificant. Little expenses on a regular basis add up quickly. Carry a small notebook with you and write down every single purchase. Now you'll know where your money's going.

8) Plug any holes discovered from the spending record. Small leaks sink great ships, even financial ones.

9) Plan ahead for annual expenses (i.e.: insurance, car licenses, medical deductibles, etc.).

10) Set long-term financial goals. After setting concrete, definite goals for future financial health, make all current financial decisions with your future well-being in mind. Keep the end result in mind -- debt-free living!

The key to getting your finances in order is to control spending and funnel that money into retiring your debt in an orderly fashion. Make sure that your debt is not growing, but shrinking a little every month. As your debt disappears (and it will, if you keep after it!), plan to put the money you have been putting toward debt reduction into a savings plan. That money will start earning you money rather than paying off growing interest payments. That will be a happy day!

Deborah Taylor-Hough (free-lance writer, wife and mother of three) is editor of the free ezine Simple Times and author of several books including "Frozen Assets: Cook for a day, eat for a month!" (Champion Press) and "Frugal Living For Dummies(r)" (Wiley Publishing). Visit Debi at:

Share this article/site with a Friend

Bookmark Us

Many of the 1,000+ articles on Frugal Fun and Frugal Marketing have been gathered into magazines. If you'd like to read more great content on these topics, please click on the name of the magazine you'd like to visit.

Ethics Articles - Down to Business Magazine - Frugal & Fashionable Living Magazine
Global Travel Review - Global Arts Review - Peace & Politics Magazine
Frugal Marketing Tips - Frugal Fun Tips - Positive Power of Principled Profit

Clean and Green Marketing

Our Privacy Policy

Disclosures of Material Connections:
  • Some of the links on our site and items in our newsletters are sponsored ads or affiliate links. This financial support allows us to bring you the consistent high quality of information and constant flow of new content. Please thank our advertisers if you do business with them.
  • As is the case for most professional reviewers, many of the books I review on this site have been provided by the publisher or author, at no cost to me. I've also reviewed books that I bought, because they were worthy of your time. And I've also received dozens of review copies at no charge that do not get reviewed, either because they are not worthy or because they don't meet the subject criteria for this column, or simply because I haven't gotten around to them yet, since I only review one book per month. I have far more books in my office than I will ever read, and the receipt of a free book does not affect my review.

Site copyright © 1996-2011 by Shel Horowitz