1. Don’t Fall Into the “All At Once” Trap.The first thing I realized was that it’s a natural tendency to think that the best way to deal with it is all at once, especially so since it was an Immediate Gratification mode of thinking that got me into the mess in the first place. That same mentality has a tendency to leave you feeling that you’re not making progress, which leads to an overall lack of motivation.

2. Nickel and Dime ItMake payments as often as you can. If you have 10 extra dollars, make a payment. It WILL add up, and you will see a difference. DON’T save it all up for the monthly payment. Go online and make the payment NOW!

3. Find More MoneyTo make any headway at all, I had to start coming up with more money I could actually use to make payments higher than the monthly minimum… it’s too easy to think that monthly minimum means “the minimum amount you need to make some headway” when it really means “the minimum amount that is best designed to increase your debt even further.”Like most people, I was used to carrying cash around, “just in case I needed it”. The problem is, when you think about it, is that we invariably wind up spending a little of that cash here and there on things we don’t really need. In other words, I came to understand that if I didn’t have it, I wouldn’t spend it.

4. Use Direct Deposit: Screw the Banks!The next thing I did was opt into a direct deposit for my paycheck. The reasons for doing this go well beyond the obvious, such as the tendency to write a number into that little box on the deposit slip that says, CASH BACK. It also put me in a position of being less likely to overdraw my account and wind up paying overdraft fees (which is the last thing you need when your already trying to save money). Without going into a lot of detail, your friendly neighborhood bank has practices in place that are DESIGNED to make you more likely to overdraw your account, but that’s another story.

5. Put that Money Into Reducing Your DebtI suddenly discovered that I COULD make a higher payment at the end of the month, sometimes significant, and my balance on my highest interest rate cards began to drop. The prospect that I was actually making a little headway gave me a boost of badly needed encouragement, and I started looking for more ways to save money.

6. Ask Yourself, “Do I Really Need This?” But don’t foregt to REWARD YourselfFast food is convenient, but is it really necessary? Nope. But I did allow myself to indulge in it occasionally. Just because I was in a financial mess didn’t mean I couldn’t reward myself. The same went for groceries. I started paying more attention to the little labels that said, “cost per ounce” instead of what had the lower price, and quickly came to understand the psychological games that supermarkets play to make the most profit off of their shoppers. The lowest price almost NEVER means the best value. Think of it as buying gasoline. That’s the ONLY price we see: the cost per gallon, not packages of various gasoline brands in colorful, deceptive containers designed to look like they hold more, with big signs saying, “NORMALLY 3.99, NOW 2 for 7.49!”

7. Reduce Your Utility CostsNext to rent or a house payment, what’s the biggest expense most of us face? Energy bills. You can save a significant amount of money over time very easily by not being lazy. Close doors to rooms you don’t need heated or cooled most of the time and shut the vents. Turn the cooling up 2 degrees in summer and down 2 degrees in winter. Turn out the lights in a room you’re not using. Buy a compact fluorescent bulb or two when they’re on sale and slowly replace all the lights in your living space. Get out of convenience mode and get into savings mode. Start thinking long term. You’ll be amazed just like I was.

8. Negotiate Lower Rates and Transfer Balances… On YOUR TermsI started making more headway, including getting some of the lower balance cards reduced by half. Now it was time to get on the phone and make some calls to the credit card companies to negotiate lower rates. Sure, I could have tried to play the Zero Balance Transfer Game that most new card offers come with, but do you really think for one second that those offers aren’t designed to do the exact opposite of what you’re trying to do? Don’t get caught up in that trap.The best way to do this is by getting your lowest rate card spending limit increased, which is something nearly every credit card company is MORE than willing to do. It also never hurts to ask at the same time if they can shave a little off the interest rate, and give them the impression that you’re sort of tied into the higher credit limit based on this. You might get nothing in the way of rate reduction, or you might be surprised. It doesn’t hurt to try.Now it was time to play the credit transfer game I’d set up for myself and do it by my own rules. I transferred as much as I could from the higher rate cards to the increased limit lower rate cards, and then focused on paying off any remaining balance on those high-rate cards. As soon as I got one to zero balance, I got rid of it. Cutting up a card from a company that’s been legally screwing you over is amazingly rewarding.

9. The Coup de Grace: Put Your Retirement Account to Work!You know that 401K plan at your company that you’ve been paying into? You can take out a loan, usually 25% of the total amount, and pay down or pay off your credit card debt. This may sound like a bad thing or a risky thing, until you consider all the ramifications. The rate on my 401K loan was 8% annually, not compounded daily on a daily balance average (credit card interest rates are really effed when you think about them, aren’t they?). The reason most people see this as a risky venture is that you’re messing with your retirement account, your future, and cutting down your potential growth by having less money to compound over time.Amazingly, this isn’t true at all. By paying off your credit card debt, your return on investment is actually the 8% rate you’re paying PLUS the credit card interest rate you’re NO LONGER PAYING. So if you’re credit card rate is, for example, 19%, you’re return on investment in the long run is 8% + 19%, or 27%. Who wouldn’t jump at the chance to invest 25% of their retirement account into a guaranteed return of 27% over a six-year period (the maximum length of repayment on a 401K loan)?Not only was I enjoying that aspect, but the monthly loan payment was several hundred dollars less than the total of the various credit card payments I HAD to make every month, which meant more money in my pocket, so to speak.Additionally, the loan payment comes out of your paycheck pre-tax. You’re not paying your normal 40% tax on that amount, so the real COST of the loan per month is even lower.

10. Cut Up Your CardsDoes this really need any explanation? It’s too easy to fall back into the same trap. Don’t do it. It’s not worth it.And that’s how I got out from under my huge credit card debt, which is something I’ll never have to do again. I keep one card, and use it only in emergencies, and pay off the balance in 1-2 months. I refuse to play a losing game. If I want to do that, I’ll just go to Vegas. At least there’s a small chance I might come out ahead.

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