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Imagining a time when you can both settle your debts and save for the future may seem like a distant dream, but here are the facts: More and more people are making moves to get out of debt and get on with their lives. You can take financial responsibility and regain control of your life, by making changes today. And soon enough, a debt-free future will be within your grasp.

  • Assess Your Debts: If you are aiming for debt settlement, then look at your whole debt picture and try to figure out a path to making sure that all debts are resolved. Assessing your debts means taking into account all of your debts — credit cards, loans, overdraft lines of credit, auto loans, personal loans, money owed to friends and family, student loans, and recurring expenses. Unless your spending and payment habits change, these debts will continue to accrue.
  • Keep an eye out for places you can cut back. What are the recurring expenses that you can cut? How much is your cell phone bill? $100? $150? $200? If this is you and you’re having issues with debt, you may wish to downgrade your phone or just get off the mobile phone plan until you’re in a better spot. Do you pay for weekly manicures or pedicures? Monthly spa treatments? Daily lattes? Behavior like this may seem rash, but in a climate of debt you often have to do things you wouldn’t otherwise consider!
  • Make a Plan: Once you know all the money you owe, then you need to make a plan to get out of debt and stick to it. How are you going to get from point A to point B? How are you going to go from in debt to debt settled? Put together a budget that includes your total income, minimum payments, regular bills and luxury expenses. Decide ahead of time what your limits are before committing to higher payments than you can afford. While this new plan may seem radical from where you’re standing, pretty soon it will just become the new normal.
  • Slow and Steady: Talk with a debt settlement company about a plan that is right for you. The company can negotiate with your creditors. Your settlement plan should move you ahead slowly but steadily. You may even see setbacks. Remember that scaling a mountain of debt is difficult. Don’t let the size of the task overwhelm you and keep persevering through each step.
  • Mission Accomplished: After a very long time and changing spending habits, you will one day see that you have achieved your primary objective. You have wiped your balance sheet clean; you have settled all of your outstanding debts. Pat yourself on the back and maybe give yourself a small treat, but don’t return to your former ways. Hopefully by now you are a different person and this debt-free life has made you view spending differently.
  • Save and Grow: The final part to this piece is to save and grow your money for whatever you want — retirement nest egg, buying a home, vacation or college fund. Wherever you designate this money, it no longer needs to go toward debt. Use the same discipline of setting money aside to pay off debts to set money aside for savings.

This article was written by Alanna Ritchie, a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College.

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