1. Save three months of income in super safe investments.

Before aggressively paying down your debt, I recommend you pay yourself first by having three months income in a savings account or other no risk investment that you can get to in an emergency. Do not put off any longer having this emergency saving. This is what you need for real emergencies. With this money, you should be able to raise your insurance premiums, not have rely on payday loans or new debt for those unexpected emergences, and be able to collateralize a secured loan for the purpose of building your credit.

2. Pay off debt before saving or investing

It doesn’t make much sense investing for modest returns when you have credit card and other high interest payments in excess of twelve percent. When you invest in your own debt, it is like getting a guaranteed return on your money since you know exactly how much interest you will save versus how much you could earn. You should save up a small fund, about three months of your income, and then aggressively work on paying down your debt instead of saving additional money elsewhere.

3. Renegotiate your debts and interest rates.

Call your creditors and simply ASK to have your interest rates lowered. The worst they can say is no, and if they say no, put a note in your calendar to try again in thirty days. Keep trying! Chances are you will find many will lower or change the terms to a more favorable rate that will save you a ton of money. You should also be shopping around for other lenders who will consolidate or transfer the balance at a more favorable rate. If you are in dire financial straits, consider hiring a debt negotiator. A good debt negotiator can reduce interest and even the amount you owe as much as fifty percent or more. You will take a hit on your credit, but the chance to wipe out half your debts would be worth the small price you would have to pay for a bad mark(s) on your credit report that you can later repair yourself.

4. Invest unexpected money back into debt

When you get money as a gift, your income tax refund, and/or an unexpected rebate or raise, don’t go out and spend that cash. Use it to pay down a bill to reduce what you owe and the interest you are paying. Another technique is at the end of the day, take all your loose change and put it into a jar. Each month, cash all those coins in and apply it as an extra payment.

5. Find lower cost alternatives

Buy items used on an auction site. Go online and search for grocery coupons on products you already use. Cancel services and use money back guarantees for stuff you are not using or don’t need. Pack a lunch instead of buying lunch at work. Rent a DVD instead of going to the movies. Listen to the radio instead of buying CDs. Go to the library instead of buying books or get them used online. Use comparison shopping websites to make sure you’re getting the lowest price. Cash in those rebates and keep accurate records.

6. Sell unused items

Sell used books, cds, textbooks, etc online via auction sites like Amazon, Ebay, and Half.com. It is easier then you think, often just the ISBN number is needed to sell a used book, and your customer pays the shipping. Other stuff like baby furniture, kids clothes, etc can be sold online.

7. Earn additional income.

Look for ways to expand your income that does not require investment. Write articles for websites. Get a part time job. Create items people want to buy. Become an affiliate marketer. Write reviews on products you like and have your affiliate URL listed in your review. Start a home based business and keep accurate records so that you can deduct expenses like your computer, internet, and your home office space to get a bigger refund or reduce what you owe in taxes.

8. End bad habits

Quit smoking and use what you were paying to speed up paying debt. Drink more water from the facet instead of buying bottled water. Eat fruits and vegetables instead of junk food. Have a meal before going grocery shopping. Turn off lights and electrical appliances when not in use. Don’t over tip or give money way. Buy modest small inexpensive gifts for friends and love ones on their birthdays, anniversaries, holidays, etc. Write a thoughtful note on plain paper instead of buying a three dollar greeting card.

9. Increase your knowledge

Use free resources online to do for yourself what you were paying others to do. Go to a local high school or community college for adult education that can help you improve your job skills. Network with other people in your industry and keep an eye out for higher paying positions/careers that you can apply for. Many people are experts at resourcefulness, study and collaborate at smart shopper websites online. Learn how other people successfully handled reducing their debt, and learn from their successes.

10. Fix and improve your credit report.

Order a free copy of your credit report directly from the three major credit reporting agencies themselves. Begin a letter writing campaign to dispute and remove inaccurate information. Often this is a battle of wills, and if you persist and proceed to aggressively push to clean up your record, slowly it will happen. The removal of just one bad item can dramatically improve your score, enabling you to access lower interest rates to move and consolidate your high interest debt. Write a consumer statement for really bad marks that are confirmed as valid explaining your situation or your dispute. For truly accurate information, go back to the source of the information and ask the creditor to change or modify their reporting. Persistence pays off. Write them a letter each month for every bad mark you have. They only need to say YES once. Finally, apply for no fee credit card and don’t use it or pay off the balance every month to improve your credit