Steps for Self-Debt Relief - How to Reduce your Debt

For consumers who prefer to provide their own debt relief, the following is a list of steps one must take in order to ensure successful debt reduction.

Step 1: Determine your monthly income.

Step 2: Itemize each of your monthly expenses.

Step 3: Cut back on spending. In order to determine what expenses are necessary, one should also prioritize their debts. Typically all expenses should be removed that are not deemed essential. Essential expenses typically include food, shelter, healthcare, and transportation costs (not including luxurious vehicles, cab rides if public transportation is otherwise available, etc.), and repayment of your debts. Entertainment expenses should be reduce and if a cheaper substitute exists for any of your other expenses, you should change it.

Step 4: Negotiate your interest rates or payment terms. Contact each of your creditors and attempt to lower your interest rate. Surprisingly many of your creditors will offer concessions if they fear that not doing so will result in delinquent payments. Even if they do not, nothing is lost by attempting to gain favorable rates.

Step 5: Revisit each of the above steps. In order to maintain one’s self-administered debt relief plan, one must constantly re-examine and assess their progress. It is possible that you can lose self-discipline and begin overspending down the line. Likewise, perhaps your credit card companies would not offer concessions on their rates several months ago, but perhaps down the line they will be far more willing. Moreover, it is important to assess one’s situation consistently because expenses fluctuate and one must be ready to adapt to these changes.