There are several ways to get out of debt depending on your circumstances. Sometimes in order to get out of debt, people have to downsize their homes, cars and lives. However, the peace of mind far outweighs the stress and burden of the debt.

Before you get started, you need to make a commitment to living on a “cash only” basis. Living within your means takes some adjusting but is an excellent exercise in grasping your financial reality. You can live on a cash basis by using your checking account or actually using cash by creating several envelopes, earmarking them for specific usages.

Initially you need to make a list of your monthly income and expenses. This list should only project your real numbers. That means your net income and net expenses. This should not include discretionary figures.

If your income exceeds your expenditures, it will be much easier to get out of debt. It will just be a matter of prioritizing your expenses and eliminating impulse buying. If your expenses exceed your income, it will take more ingenuity to get out of debt.

You should prioritize your expenses and put together a tickler file to pay them once or twice a month. Set up payment dates that will be easy to remember. Many businesses use the 1st and 15th or the 15th and 30th of each month for accounts payable.

The main reason people run out of money each month and cannot get out of debt is impulse buying. Go by your list and do not buy anything that is not on your list. This includes grocery shopping.

Groceries and household items can be purchased at a substantial discount by buying through co-ops, wholesale bulk stores and by using coupons. Bartering is also a lost art in modern times but a very efficient opportunity for attaining specific needs. You should allow for incidentals but discipline needs to be observed. You can apportion a certain amount for these items several times a month so you do not deplete your monthly allotment too quickly.

Mortgage and credit card debt are the most significant expenses most people have. If you have an adjustable mortgage, talk to your lender and negotiate a fixed mortgage. This means your monthly payment will become a firm number that you can depend on and factor into your monthly estimate.

If possible, contribute additional money toward your mortgage. This money will go directly toward reducing the principle. Years can be gained in paying off your home by using this simple technique.

The same is true for credit card and auto loan debt. You can negotiate with your lender for a lower rate. By continuing to make the same payment, that money will now go directly toward paying down the principle.

If you have made an honest effort to make regular monthly payments, you are in a good position to negotiate a lower rate. This is the reason it is important to always make some effort to pay each expense every month. Even if you cannot pay your minimum amount, you should pay something as an earnest gesture. It will go a long way in negotiations, should they become necessary.

Ideally, a credit card can be an asset if it is used and paid off in its entirety each month. This way your money can continue to work for you and earn interest. Then you make one monthly payment for most of your expenses. Often frequent flyer miles or some other incentive accumulates with the dollars you spend through a credit card. Therefore, if used properly, credit cards can actually make money for you.

If possible, you should add one extra expense category to your monthly list. This payment should be to you, placed in a special savings account. It is amazing how quickly the dollars can accumulate and inspire you to continue on your new path to get out of debt. It takes discipline and a solid desire to get out of debt in order to succeed. However, once you are determined, the process can even be fun.