For most people, the first thought to come to mind when trying to get out of debt is, “I need to make more money.” Yes, often this is the case. However, there are several other strategies that you should incorporate into your spending and financial habits starting now to begin working towards becoming debt free even without increasing your income.

Commit!

The number one most important step towards getting out of debt is to commit to the process. It took years for you to create your debt, and getting out of debt won’t happen overnight. So, you will have those times when it seems like your progress is minimal, but it is vital to your goals of being debt free that you stick to your budget, financial planning, and remain committed to the process even in those times when all seems futile.

Understand your Financial State

Before you can get out of debt you first have to understand exactly how much debt you have. The best way to do this is by sitting down with your bill pile and creating an Excel spreadsheet that shows all of your balances, monthly payments, and interests rates. Doing this provides you with an easy to understand overview of where your money is going.

Shrink those Interest Rates

If all you are doing is paying the interest each month you will never bring down your outstanding balances. The easiest way to make your monthly payments work more efficiently for your goal is by transferring high-interest credit card balances over to lower interest or zero interest accounts and closing out accounts with annual fees.

If you own a car or home, you will want to re-finance your current balance at a lower interest rate if possible without extending your loan. When re-financing look into shortening the life of the loan while you lower your interest rate; doing this will have your home or car paid off that much faster so that those funds can be applied elsewhere.

The one exception to not taking money out as you refinance is when it comes to paying off higher interest accounts like revolving credit or credit cards.

Most credit cards range in interest rates from between 12 to 25 percent depending on your credit history and account type. With mortgage rates being between 3 and 5 percent in recent years, you can save a bundle in interest as well as eliminate some monthly payments by rolling those high-interest card balances into your refinancing and paying them off immediately.

The key here is NOT to use your cards after you have paid them off. Instead lock them away for a serious emergency, or cancel them and use the money that you would normally apply to these monthly payments to pay down other expenses or invest in an interest earning account. No one needs more than 1 to 3 credit cards. So, if you have more than that start getting rid of those that have the highest interest and fewest perks.

Becoming debt free takes time, patients, and a clear vision of your path to financial freedom. Taking the time to understand your situation and making modifications to your current debt arrangements will allow you to begin bringing down your balances while you use new found money to pay down other existing expenses or set-up savings options to keep you from accruing new debt.