How to Stick to your New Year's Resolution to Get Out of Debt

According to one source, the 7th most common New Year's resolution is to get out of debt. It is the most common financially related New Year's resolution. However, the fact that it shows up in place 7 means that many people make the same resolution year after year and fail to keep it. This year, you can stick to your resolution! Read this article for tips.

	Write down your goal to get out of debt. You don't have to wait until next year. Write it down now. Do not proceed to step 2 until you have written it down.
	Return to step 1 if you have not written it down yet. Seriously.
	Now that it's written down, refine the goal. A goal should be quantifiable. For example, "Get out of debt" written in that form isn't a very good goal. A better goal is "Pay off all non-mortgage debt by June 30th, 2009". A moderately aggressive debt payoff plan would be to dedicate 1/3 of your income to paying off debt. For example, if you have $10,000 in debt and make $45,000 per year, then you can dedicate $15,000 per year to paying off debt, so it will take you 2/3rd of a year - 8 months - to pay off $10,000. So, your goal date would be September 1, 2009 if you start on January 1, 2009.
	If you are unable to pay off all debt in a year, set an upper limit on the remaining debt for the end of 2009. For example, if you have $20,000 in debt and can only dedicate $15,000 next year to paying off debt, set the following double goal: "Pay off all non-mortgage debt except for $5000 by December 31, 2009, and pay of all non-mortgage debt by April 1, 2010."
	Write down the modified goal.
	Create a step-by-step action plan. The following steps are the plan recommended by America's most successful anti-debt financial counselor, Dave Ramsey.
	Get on a written budget. Designate where every dollar goes before it comes in. That way it will go to the right place.
	Get current with all creditors if you are not. Negotiate deals with whoever you can. Stop all retirement and college fund contributions until you are out of all consumer debt.
	Put $1000 in a bank account. This money will allow you not to go further into debt when an emergency comes up as you are getting out of debt.
	List your debts from smallest payoff balance to largest payoff balance. (Not from smallest interest rate to largest interest rate!)
	Pay minimum payments on all debts except for the smallest debt, and dedicate every other debt-payment penny to the smallest debt. Once the smallest is paid off, move to the next smallest debt, and so forth until all debts have been paid off. Remember to enjoy having eliminated a debt! The joy of paying off one debt will help you stay on track.

• Commit to never going into debt again.
• If you get off track, don't give up! Regroup and start again.
• If you use money from your $1000 emergency fund, go back to paying minimum payments on everything until you have $1000 again.

• Don't consolidate debt. That doesn't eliminate debt - it just hides it.