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Last month, June 5th to be exact, I posted a new topic to my blog regarding a financial health checkup or something to that effect. I thought it would be fitting, today being Independence Day in the U.S. and all, that I revisit this topic.

Make TODAY the day that you declare YOUR financial independence.

Here are some simple things you can do to start paying down your debt:

1. Spend less money than you make. I know it sounds obvious, but if you don’t spend it all then you are more able to pay down existing debt or save for the proverbial rainy day. Everyone should strive to not live paycheck-to-paycheck. Doing so only puts you in jeapordy of running up your debt in the event of an unexpected expense like car or home repairs, etc.

2. Once a week I want you to forgo something simple that is not a necessity. This could be drinking water from the fountain at work instead of buying a drink from the vending machines, or reading the news online instead of buying a newspaper. Make a conscious effort to think about the purchase when you are reaching for your wallet or purse.

If you catch yourself saying “do I really need this?” or “what could I do instead of this that doesn’t cost any money?” then you have made an excellent step toward saving money. Start by doing this on just one or two days a week - say Monday and Wednesday. This will help identify things in your normal routine without making you feel like you are totally shutting down from your normal lifestyle.

3. Find something in your house/apartment/condo/garage… where ever… that you don’t like, have never used, etc. and put it up for sale on ebay, in the classifieds in the newspaper (but only those publications that are free or cheap to advertise), yard sale, pawn shop, bulletin board at work, you get the idea. But sell it. Don’t give it to Goodwill or charity (unless of course you are unable to sell it and you still don’t want it!). Craig’s List is an excellent online service that you can use if you can’t think of anything else. This item is not meant to punish you but rather to encourage you to simplify your life while simultaneously trying to achieve your goal of financial independence.

4. Consider debt consolidation as a last resort; before doing that, contact your creditors and work out payment plans that don’t involve harming your credit. If you are in significant debt the odds are good that you are regularly contacted by debt consolidation companies that promise to help lower your monthly payments, etc. BEFORE you consider using one of these services do yourself a huge favor, contact your creditors yourself and let them know you want to repay them but you are trying to get out of debt and you need to work out terms that make it easier to pay them back.

Most lenders would much rather you approach them directly and work out a way to repay them with their agreed upon interest rather than going through a debt consolidation company that is seeking a portion of the money from your creditors (that’s how most of these companies stay in business… they charge you nothing but get a cut of the money from your creditors).

5. Look for an extra source of income. Do you know someone who manages a local restaurant or business that needs part time help? Look in the classified section of the newspaper or at the help wanted ads online, around town, etc. Don’t get pulled into anything that requires you to chip in money to “get started” like selling cosmetics as an independent consultant or hosting parties in your home for rubber/plastic bowls and spoons… I think you know which companies I’m referring to!!!

Getting out of debt for good…

It won’t happen overnight, and depending on the amount of debt that you carry it may take anywhere from a few months to many years. But the relief that comes with not worrying about making ends meet is something most people only get to dream about… and there are countless personal finance books out there whose authors thrive on people who are trying to get out of debt. For the most part, there is really nothing wrong with any of these books so I am not writing to bash them. In fact, I highly recommend Andrew Tobias’ book The Only Investment Guide You’ll Ever Need as well as several other authors, like Suzy Orman. Anything from Suzy’s collection of personal finance books is excellent in my opinion.

But you can also find free advice on the Internet or by checking out books from the library. So if you’re in debt, don’t go buy a book… read up on these topics online and at your library.

As always, I welcome your feedback…