Top Ten Debt Reduction Tips for Young Adults

So you went crazy with your credit cards, charged up a storm, and now you’re sitting on a mound of credit card debt. The monthly payments just keep climbing, and you might even be getting a nasty note or two from the collections department of your credit card company. You have to stop living beyond your means (that’s so 2005 anyway) and start paying off those credit card bills. It's time to bite the bullet. Or is it?

Who says you can’t be hip, have a life, and dig yourself out of debt at the same time? If you’re trying pay off of a mound of credit card debt, then you’re going to have to find ways to cut back on your spending. But you still want to be able to have fun while you’re paying for your past over-spending, don’t you?

You need to get creative. You have to examine your spending patterns (those credit card bills make this so easy to do), and you have to look for places you can make cuts without reducing your social life to rubble. That’s where this Top Ten list might come in handy. Consider it a starting point to help you brainstorm on ways you can make cutbacks without making painful sacrifices.

So with that preamble, let’s get on to the list.

10. Walk Your Way to Debt Reduction
Gas prices are sky high and forecast to go even higher for the foreseeable future. You could buy a hybrid and go even deeper in debt, but that seems counterproductive. You know there are many times you could walk and you don’t, even if it’s just down the block. Or maybe you could hop on public transportation now and then. Leave your car at home and watch for the savings at the end of the month.

9. Fill Your Tires, Get Better MPG, and Get Out of Debt
Okay, I know I lost a lot of my fellow North Americans with that first selection. We are, after all, a continent of drivers. So if you can’t kick the car habit, at least make sure your tires are full. I filled my tires and my MPG literally increased from 19 to 23. Project that over course of a month, and you’d be surprised what you’ll save, given current gas prices.

8. Replace Starbucks with Maxwell House
Or with whatever brand you actually like. The point is, do you really need to wait in that line each day to shell out $3.95 for that double mocha? Go retro and get a travel mug. If you’ve been going to the fancy coffee shop even 4 days a week, you’ll net a cool $75 a month in savings buy making it yourself, even after you pay for that can of coffee.

7. Eat at Home and Pay Off More Student Loan Debt
Eat out one less night each month. Cook up some burgers on the grill and keep that $80 plus tip in the bank. Take some cooking lessons and impress your friends with your newfound skills. See, this can be fun if you get a little creative. Plus, you can use the money to pay off more of your student loan principal.

6. Wash Your Own Car and Watch Your Debt Disappear
This one is especially relevant for my fellow Californians, but everyone else feel free to try it too. You know you shell out $15 bucks a week to wait 40 minutes while other people make your car all clean and shiny. Here’s a radical thought: pick up your hose and do it yourself. Then spend the time you just saved surfing the internet for more money saving tips.

5. Brown Bag It to Work and Send Debt Packing
Brown bag it just like mom used to prepare lunch for you, only substitute a Caesar salad for that peanut butter sandwich she would always give you. Seriously, you can probably pocket five bucks a day if you bring your own lunch. That’s like $100 bucks a month, even if you cheat one day a week.

4. Switch to VOIP and Save Money
It actually works well now, if you have a good high speed internet connection. If you make many long distance calls, you can really save big with VOIP (think Vonage – you already have their jingle stuck in your head). If you have DSL and your phone company won’t let you drop your land line, have them convert it to a stripped down, pay-per-minute basic service.

3. Rent a DVD and Reduce Your Debt Even More
Instead of going out to the movies, watch one at home. You’ll save on the tickets, the $6 popcorn, and you won’t have to get up to let the guy with the small bladder run to the bathroom six times. Rent some great old classics, and enjoy. Maybe by the time you get out of debt, the new movies won’t be as crappy as the ones in theaters lately.

2. Switch to Basic Cable and Say Goodbye to Credit Card Bills
Do you really need 289 channels? Do you ever watch anything above channel 99 anyway? You can save $40 bucks a month easily here. Cable prices are up there. Get a cheaper package and save!

1. Pay Less for Car Insurance and Pay Off Debt Once and For All
Odds are, you are paying too much. I switched and saved $600 a year. Use a comparison site. Do a little research and find the lowest price for a well rated company. Then when you send in the check, figure the savings and send a check for that amount to your credit card company.

That completes my Top Ten list, but you should continue thinking of creative ways to save and get going with your credit card debt reduction. The more you send in to your credit card company, the faster you’ll be debt free. It’s the interest that’s the killer, so paying down the principal will cut your monthly minimums and allow you to apply the difference to pay down the principal even more. Think of it as compound savings.

It’s time to get started with your credit card debt elimination plan. So get out there and start saving!