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Add 'Debt' To Your List. Debt is something that we would like to avoid and alleviate as much as possible. When using a credit card it can be easy to rack up debt fast due to overspending and bad budgeting. When a credit card is used incorrectly, excess debt is most certainly the final outcome. Reducing debt is no magic trick; it takes hard work, time and dedication to the cause. But it can be done. Here are some tips for reducing your debt within a year.

  1. Do You Know How Much You Owe?This is the first and arguably the most crucial step. If you don`t know your initial debt, there`s no way you can efficiently work your way out of it. Locate how much you know by getting a credit report or calculating totals on your credit card statements.
  2. Save the Date. Set up a payment plan that will make eliminating your debt fun for you. Try setting up payment check points every six months or so, where you reward yourself if you remain on track with your budgeting. Also, remember the date that you made a commitment to reduce your debt. Mark it as a personal holiday, and celebrate when the day comes.
  3. Do the Math. Calculate how much your monthly payments will be if you are trying to get out of debt in a year`s time. For example, if you are $8,000 in debt and can afford to put away $800 a month, you will be out of debt in a year. If a monthly payment of that nature is too steep, see how much it would cost to be out of debt in two years, or five years.
  4. Be Realistic. Establish a plan that you can realistically accomplish. You may need to solicit the help of friends and family, because while you are only the one responsible for repayment of the debt, friends and family can make the transition easier. Talk to the people in your life about sacrificing expensive shopping trips, wild vacations and take-out food with you. Be conservative.
  5. Stick to the Plan. When you make the commitment to pay off your debt, stick to the plan even after the debt has been eliminated. To illustrate, say you were putting aside the $800 a month in order to get out of debt in a year. After the debt is paid off, and if you continue to save the same amount of money, you could have $9,600 saved up for whatever comes to mind.
  6. Watch How You Use Your Credit Card. The reason you landed yourself in debt, was because of your credit card. This time, be mindful of how you use your credit card, and what types of purchases you make on your credit card. If you spend more money on groceries or if you spend more money on large ticket items, it`s important to know so you can keep a close eye on the purchases that push you further into debt.