As the year comes to a close and the holidays pass, spending is on the minds of many. And with spending, often comes debt. Debt is something most adults carry in one form or another. It’s something that enables you to buy things that would otherwise be out of reach, such as a home or car. Some debts can be paid off sooner, while others are with you for the long haul. If you’re carrying significant debt in all forms, it’s time to start reducing some of them so you can afford your other debts more easily.

The simplest rule of managing debt is to live within your means. That is, don’t spend more than you make, and if you use credit cards to pay for things now, make sure you can pay it back later. Sometimes paying it all back isn’t possible because of life events and you start accruing interest on those balances. You’re probably asking, “How do I get rid of this debt if I don’t make enough to pay it off?”

The first step is to trim your spending and create a budget for every month. Do you eat out frequently? Or is a pricey coffee something you buy every day? Unfortunately you’re going to have to sacrifice your pleasures for a little while in order to find the cash you need to apply to your debts. If you can’t stomach the idea of giving up these things entirely, restrict their purchase to a couple of times a week. You’ll build up a positive balance in your account that can be used to pay down debt quicker.

If you can’t find extra money, look into consolidating debt into a personal loan and have one payment instead of multiple. A personal loan usually has a lower interest rate that’s fixed, and you can pay off the balance more quickly than credit cards. Make sure to reserve your credit cards for emergencies only to avoid building up a new balance. Don’t close the cards, though, as the open accounts help your credit rating. If you’re in the process of buying a home, be sure to check with your loan officer before opening, closing, or consolidating any lines of credit.

Source: TheBalance.com