It’s no better time than the present to make a plan right now, but since this particular right now coincides with the new year, it’s an especially good right now.

What is the one specific action that you could start right now that would help you reduce your debt? It doesn’t really have to be big; in fact, the simpler, the better.  Maybe you’ll pack your lunch one more time a week, and add $10 per month to your credit card payment.  Something manageable, something easy, and something that you can stick with.

It doesn’t have to be the last thing you do toward your debt reduction.  Hopefully it won’t be.  But a plan to do something very easy will lead to plans to do other things that will build upon one another.

• Free Money Finance discusses the benefits of debit cards
• Blueprint for Financial Prosperity explains why he thinks Dave Ramsey is brilliant
• The Digerati Life lists 21 deal sites to help in saving money for extra debt reduction

Enjoy the rest of the posts!

So if throwing extra money at your debt is good, throwing more extra money is better, right?  Yes, but up to a point.  If you throw every last spare dime you have at your debt, it drains your bank account, and you’re left with no cash if the car breaks down, if you have a debilitating toothache, if your roof springs a leak, etc.  You have no emergency fund, and out come the credit card again, with an increase in your balance soon following.

The moral:  Build up an emergency fund so that if you need to shell out $500 or $1,000 for an unexpected expense, you have it to spend.  Building this up will slow your debt reduction, but the peace of mind is worth it.

Maybe you’ve tried using cash for your purchases, but you always find yourself running out, and that credit card is right there, and it’s accepted almost everywhere.  Maybe you’ve worked out a budget, but the follow-through hasn’t been there, and you run over each month on little purchases all over the place.  Maybe you’ve gotten a little more serious and gotten your cards out of reach, either by freezing them in a big block of ice or by giving them to a friend you trust not to let you off the hook so easily.  But, when it gets right down to it, ice melts, and friends give in because they’re sick of you pestering them and because, after all, you are a grown-up.

If your debt continues to eat you alive despite all of these steps, and you really want to get rid of your debt, it’s time to get out the scissors and cut up your cards.  Into tiny pieces, so you can’t use them in stores.  Into tiny enough pieces that you can’t reconstruct the number.

The credit card company, of course, won’t forget what you owe them, so cutting up the card won’t make the bills go away.  But it will make it much more difficult to add any new charges to that account.  You’d be limited to online and phone purchases, if you could remember the number and the little code on the back.

Drastic times call for drastic measures, and this is one of the more drastic measures you can take on your credit card habit.

(Photo: SqueakyMarmot)

• Art of the Coupon presents emotes with a law student’s lament.
• Tough Money Love calls the college student debt machine a national disgrace.

Please check out the carnival for the rest of the great posts, all of which are close to topic this week.

An overspender trying to reducing spending faces many of the same temptations as a fat person trying to lose weight.  Sticking to a cash-only or a debit-only budget after being able to charge freely on a credit card is difficult.

Just like an overweight person would keep snacks out of the house and “forget” his money for the vending machines at work, a would-be debt slayer would want to keep credit cards out of reach.  Just enough out of reach that you think twice about spending on the card.

You can freeze your accounts.  Literally.  Immobilize your cards in a big block of ice. Take a fairly large container (maybe a half-gallon milk container).  Stack other things inside, like soup cans, that will place the card squarely in the geographic center of the bigger container.  (It’s too easy just to throw the card in the bottom.)  Then fill the container up with water, and put it in the freezer.

Now, you’ll need to take block of ice out and melt it to get at the card.  This takes a minute.  Now, if you’re thinking, “Ha!  I can do it in 30 seconds!” then more power to you, but you’re defeating the purpose!  Why are the cards frozen?  Because you want to not use them, right?  So if you find yourself unfreezing your account, think about what you’re going to buy and whether you really need it.  Maybe you can save a little money that you would have spent.

This is just a Debt-Eye Mind Trick to help you stay on track.  If it’s a matter of will, just chill!

(Photo: *clarity*)

Next week Gather Little by Little will be hosting.

• Digerati Life gives ten frugal steps to help survive an economic crisis.
• No Credit Needed describes how credit card companies calculate minimum monthly payments.
• Erase Debt shows how to get rid of debt with less stress.
• Finance Tips 101 reports on dealing with credit repair.
• Cash Money Life explains how this year’s credit crunch affects you.

Enjoy the good fixings!