What's the fastest way to get out of debt?

I recently was asked a simple question "What's the fastest way to get out ofdebt?"

Unfortunately, the answer isn't so simple. In my experience, getting out ofdebt takes time and a solid plan. I think the biggest mistake that Iendured was trying to follow a monthly budget. No matter how sincere myintentions, I always ended up with more month than money with this type ofbudget.

Most of your bills are due once a month, but your income may come in everyweek, every two weeks, or every other week. If you are a two-householdincome, managing alternate paycheck schedules may even become morecomplicated. Bottom line, if you keep budgeting on a monthly basis insteadbudgeting based on the timing of your paycheck, you will also have moremonth left than money. Because some months have four weeks and others havefive, budgeting on a monthly time schedule becomes ineffective.

Hint: if you are a two-household income, budget weekly based on the averageof your incomes

Life became so much more tolerable when I budgeted my money based on thetiming of my income. In fact, I felt as though I took control back from mycreditors when I made this subtle shift. Yes, I owed them and I had to paythem in a timely fashion. It took about three months before I could see thereal momentum of my budget but my progress started having a tangible andpositive affect. Finally getting this debt off my shoulders appearedpossible after I consistently split up my payments based on the timing of myincome.

Some points to consider:

1. Figure out how much money you need to set aside each pay period forbills based on the timing of your income.

2. Begin thinking in terms of when you get paid not when yourcreditors want you to pay them.

3. Design a sensible plan for how your paycheck will be allocated eachpay period.

Oftentimes, creditors are billing you at the same time per month making itimpossible to make ends meet. Call these creditors and/or utility companiesto request a different billing cycle that will better suit your incomestream. As you pay off one balance, adjust this again and again until youfind a rhythm that is right for you.

If you spend only 1-2 hours a week paying bills and managing your checkbook,you are not becoming a master at your finances. It takes time to design aplan and to work it. If you do anything consistently every week, it becomesa habit and eventually you will become really good at it.

Another key factor is to stop overspending. To make substantial progresswith your budget stop spending more than you earn. This may seem obvious,but implementing this concept into practice isn't so easy. As an example,if you intend on spending $60 at the grocery store, then don't spend $75.If you allocate $25 for gasoline this week, don't fill up the gas tank.

Finally, take a hard look at your income and determine if there are ways foryou to make more money at least until you have your finances in check. Ifyou have poor budgeting habits, making more money isn't going to be silverbullet to answering all your woes. Unless you change your spending habits,you will find yourself in a vicious cycle and working really hard to getthere. Here are some options:

1.. Consider a part-time job this holiday season. The 10-20 hours youwork between now and the end of the year might help you pay off a creditcard balance so that you can get ahead of the curve.

2.. Ask for a raise at your current job. If you believe that you areunderpaid based on the current value in the marketplace, do some researchand go to your boss with the results. Salary.com, www.salary.com, offers afree Salary Wizard to give you a rough estimate of what people are beingpaid in your position based on geographical location and education level.

3.. Move closer to your job or find a job closer to home. If yourcommuting costs are rising and your salary is staying flat, maybe it's timeto re-evaluate the real cost of getting to and from your job.

4.. Get an employee referral bonus. Many employers now offer an incentiveto employees if they refer a prospective employee who gets hired. In somecases this could be $1000 or more! If you help your employer find theskilled workers they need, this could benefit you without your having towork very hard. Check with your company's human resource department to seeif they offer such a program.

A commitment to working a budget that will alleviate the fear, frustration,and worry will be worth the freedom that comes along with it. The firststep to making this journey is to design a sensible plan and track exactlywhat you spend each day.

The online program, One Paycheck at a TimeT eToolswww.onepaycheckatatime.com/etools.asp, is a monthly subscription-basedservice which helps you to become debt free, paycheck to paycheck. TheeTools guide you to your goal by giving you web tools to:

a.. Design a personalized plan based on your income and expenses
b.. Manage spending choices in just a few clicks
c.. Measure your success as you track your progress
d.. Get savings tips, ideas, inspirational stories along with a monthlynewsletter

You deserve the most sensible, motivational, and interactive budgetingresources available online. Don't just budget your money, become debt free,www.OnePaycheckataTime.com.