• Debt freedomdebt defined image by Christopher Walker from Fotolia.com
  
  Debt may sometimes be necessary to accomplish life goals like home ownership or starting a business. Too much debt, however, limits resources needed to plan ahead for your future. Regardless of your income, you can free yourself from debt by setting a budget. Use cash as much as possible and plan ahead for purchases instead of relying on credit cards.
  
  

Budget

• Use a spreadsheet or other bookkeeping software to track your monthly expenditures. Write out a personal or household budget that includes all of your expenses. Don't forget to include non-essential items such entertainment, eating out and unplanned clothing and accessories purchases in your budget. Keep receipts and enter all of your purchases in a month. You don't have to eliminate all non-essential items, but tracking how much money you spend in this area will help you figure out which items you can comfortably afford. Plan ahead for purchases by writing them into your budget and setting aside funds in a separate account. Purchase items when you save up enough money to pay cash.
  
  

Pay Off Credit Cards

• Credit card balances account for a large percentage of personal debt. It can take many years to pay off a relatively small balance if you don't pay more than the required minimum monthly payment. You can tackle this problem and pay off your credit card debt, by making a spreadsheet list of all your credit card balances. Write down the interest rates for each. Starting with the card with the highest interest rate, make a plan to pay it off within six to 12 months. When you accomplish this, pay off each remaining card, starting with the next highest interest rate. Then resolve to use credit cards only if you can pay the bill in full at the end month, or for emergencies.
  
  

Sell Your Expensive Car

• Car payments are another source of household debt. While you need reliable, fuel efficient transportation to get you where you need to go, if you struggle each month to make your car payment even after tightening your budget in other areas, then you probably have more car than you can afford. Research the value of your car to determine whether it is more advantageous to sell it or trade it in. When you make a decision, sell or trade in your car and purchase an affordable new or used car.