Let me begin with a few basic questions:

Do your finance charges exceed the minimum payment due?

Do you find yourself charging more each month on your credit card that what you paid towards your last statement?

Does your debt cause you to lose sleep or heighten your anxiety?

If you answered yes to any of the above questions, I may be able to assist you in a very effective way to reduce your debt and lead you to a path of financial freedom.

First of all, you will need to take a good hard look at your spending habits and ask yourself if there are any areas that are excessive and unnecessary. The change can only begin with you. If you are ready to commit to a complete financial overhaul, you will need to embrace change. While change may be especially painful when it is connected to the pocketbook, it is the only way to break free of the endless cycle of accumulative debt.

Now, let's begin our journey.

Make a list of all your credit card debt. Write down how much you owe and the interest rate for each credit card.

Whenever possible, consolidate. Be on the lookout for any promotions offered by your credit card company. If you have a good credit rating, you may receive offers to transfer your debt from one credit card to another for an interest rate as low as 0% for a period of time. Regardless, seek an interest rate that is less than what you are currently paying to avoid excessive finance charges. Be aware of hidden fees. Sometimes you can find an offer to transfer balances without a transfer fee.

Create a payment plan. Now that you have decided to radically change your spending habits, how much of your monthly income can you apply towards reducing your credit card debt? Be honest with yourself. It is important to assess your payment plan without setting yourself up for failure. If you find you are unable to make a reasonable payment amount to significantly reduce your debt, you may want to begin seeking alternative ways of creating a cash flow and begin applying that income towards your debt reduction. There are a lot of ways you can make a P/T income at your fingertips if you set your mind to it.

Create a progress chart. I cannot emphasize enough how important it is to write your payment plan on paper. I found the Columnar Pads to be very helpful in my organization and charting process. These can be purchased at any office supply store. Simply list your credit cards in order of the least balance due to the greatest balance due. Determine the amount of each payment to be applied to each credit card and document in each column. A payment should be made to each card on a monthly basis, with payments being applied from each paycheck received. This will keep you on a strict budget and on track on a weekly basis.

NOTE: You will want to apply your largest payment to the credit card with the least amount of debt owed. All other credit cards should receive the minimum payment due until this first credit card is paid off. Once you have paid off the first card, proceed to the next credit card with the least amount of credit card debt. Continue with this process until all credit cards are completely paid off.

Reward yourself! The psychology behind this is simple! Once you have paid a credit card down, by all means celebrate! However, simplicity is the key. There is no need to throw a huge party and spend a ton of money. Life offers many simple pleasures. Choose whatever luxury or simple indulgence will aid in motivating you towards you goal.

This financial plan was personally created when my husband and I found ourselves in a heap of debt when the stock market spiraled in 2001/2002. We were forced to sell our way out of approximately 3 years of annual income in the stock market in less than a year and we used our credit cards to shore up our stocks in attempt to avoid selling more stocks. Huge mistake! To our despair, we owed 50% of our annual income to our credit card debt. You can only imagine the emotional and financial turmoil we faced on a daily basis.

Always up for a challenge, I began to organize our finances on paper and chart out our progress. As silly as it may be, I actually put a ?star sticker? by each payment made and continued to chisel away at each credit card until is was paid off. The heavy burden on our backs became lighter until we were finally set free from all the debt. Today we are debt free and in the process of building our dream home with a minimal house payment on the Pacific Ocean, due to our lifestyle change and savings strategies.