1) Stop Adding to Your Debt

• If you want to get out of debt, the first step is to stop adding to your outstanding balances
• One trick that works is to keep only one credit card in your wallet (the card with the lowest credit limit)
• This makes it almost impossible for you to get into any serious trouble with it
• Other cards with higher limits, stay at home in your dresser drawer 
• After a while, you'll forget they're there

• Create a list of all the places your money goes every month; including rent, credit cards, utilities, food, car payments, gas, insurance, medical, dental, Starbucks, etc.
• Then, split the list into two separate lists
• The first list includes items that you'll always have to pay (ex. utilities)
• The second list includes debts you can pay off
• For example, you'll always have an electric bill, so that goes on the first list
• Since it's feasible to pay off your Walmart credit card, that goes on the second list
• For the second list, reorganize the order of the items either by "Largest Account Balance" or "Largest Interest Rate"

• First, make the minimum payment for every bill
• Then, make an extra payment for the one item that is on the top of your list
• Repeat monthly until the item on the top of your list is paid in full
• After you've paid off the first item, take the money you're using to pay it off and now apply it to the second item on the list
• Knock off each #1 item every month until all balances are paid off in full

• So, if you are already in debt, how can you expect to pay anything extra to the bill at the top of your list?
• If you spend $100 a week on groceries, try to spend $5 fewer dollars
• Do you buy a latte every day before work? Why not treat yourself to one special beverage each week and try to swallow the company coffee on the other days?
• Whatever you can cut out of your weekly spending, you can add to the payment to the top item on your lists

• Our lives are full of struggles, and certain unplanned expenses will pop up from time to time like car repairs, or extra medical/dental bills
• Set aside some money you save from cutting your expenses and stash it into a special savings account that is created just for this purpose
• The emergency fund can be used instead of pulling out your credit card

• Contact your credit card company to see if they can offer you a lower interest rate on your card
• If not, shop around for a card with a lower rate and transfer your balance to the new one
• See if your bank offers a consolidation loan, where they pay off all of your credit card debts, and you pay them back at a lower interest rate

• Give yourself incremental milestones ($500, $1000, $1500, etc.) and reward yourself with something fun
• If this reward costs money, then set aside a little cash each month to save for this very purchase
• Keep the reward under $100
• The emotional significance of reaching a milestone is far more important than the value of the reward

• The more items you can knock off your list, the more money you'll have to pay off the remaining debt
• With each new milestone, add more money to your savings account
• As you eliminate debt, you want to increase your savings and plan for your future (ex. buying a home)