10 Tips for Getting out of Debt in 2008

Between the mortgage crisis, weak dollar, and rising costs for essentials, more Americans are finding themselves accumulating debt than ever in 2008. With energy costs continuing to rise and the economy looking uncertain over the next couple of years, 2008 is a good time to start saving money whenever and wherever you can. Here's our list of top 10 ways to start saving in 2008.

1. Make a Budget.
Ok, so the process of making a budget won't save you any money in itself, but it's important that you get a realistic look at your financial situation and where your money goes before you can figure out where it's best saved.

Fire up your favorite spreadsheet program (or grab a piece of paper) and spend some time writing down exactly where your money is going each month. Include everything, from the morning coffee on the way to work to your mortgage payments. Don't forget to factor in expenses that aren't paid monthly as well - a $2500 vacation once a year for example has a 'monthly cost' of about $210 when you divide it by 12 (even though you're probably not paying for it that way). Once you've got a note of everything, get the total cost together then compare it to your current income.

If you're like most people reading this, a quick check will show that you're either spending more than you're bringing in, or cutting it really close. Luckily, with your budget now done you have a list of expenses to look at, and hopefully some you can cut down on or get rid of on review.

2. Stop Taking On Credit.
Unless it's absolutely necessary, pledge to no longer put anything on credit. While you might not have broken things down this far on your budget, chances are you're paying a healthy portion of your income out in interest to credit card companies and other loans. While some loans make good sense (like a mortgage), things like department store and credit cards have notoriously high interest rates, and carrying a balance means you're losing a lot in interest each and every month.

3. Pay Down High Interest.
No longer taking on new credit is one thing, but there's still the matter of what you might already owe. Once you've eliminated some expenses; use the money you've saved to pay down your high interest debts as much as possible each month. Start with debts that incur the highest carrying costs and keep working your way down the list once it's paid off. This might not put money in the bank right away; but consider the actual money you're saving on interest and how much extra you'll have once the balance is gone.

4. Make More Money.
Not to make it sound easy; but for many it's easier than it sounds. Can you take on any overtime at work? Maybe you're even due for a raise? Is there a small business you could be running on the side? Take on a part time job perhaps? Getting in even a modest extra income will allow you to pay down your debts much faster, especially in tandem with frugal budgeting.

5. Cut Your Communications Costs.
When there was first extended competition in the marketplace years ago, lots of consumers switched their telephone companies and managed to save a lot on their bills by taking newcomers up on some agressive pricing. In 2008, with the availability of fiber-optic networks and broadband Internet, many companies are able to offer a number of services that they hadn't been able to just years ago. Phone service using VOIP, television offered through fiber optics, there's a lot more competition than there used to be. Shop around, and see what kind of deals you might be able to get changing companies. Many will offer significant discounts to households buying multiple services as well, making for even more significant savings when bundling.

6. Cut Down On Gas.
With the price at the pumps ever increasing we spend a lot of time griping about gas costs, but many of us don't do much to conserve. While buying a hybrid it may not be in the budget, you can cut down on your fuel expenses by changing your driving habits. Taking a bike to work might be a bit much - but how about grabbing groceries on the way home instead of making a separate trip, or sharing a ride a couple times a week? With the price of gas going nowhere but up, it could soon save you hundreds a month (if it doesn't already).

7. Conserve Energy.
Even if you could care less about conserving for other reasons, there's always one good reason to cut down on your power use; like gas, the cost of electricity is going nowhere but up. Doing simple things like swapping incandescent light bulbs with florescent's, turning things off, replacing inefficient appliances and changing the thermostat up or down a degree or two can add up to some significant savings now more than ever.

8. Cut Down Convenience Costs.
It's as true in 2008 as it ever was - what might at the time seem like insignificant costs; such as eating out and buying coffee, can really add up over time. Saving 5 or 10 bucks a day can go a long way towards saving money you could be using to pay down your debts.

9. Start Saving On Groceries.
With the cost of food going up as well, smart shopping in the grocery aisles is another good way to keep your costs down. Saving at the grocery store haven't changed much over the years; don't be afraid to use coupons, keep your eye out for things on sale, buy frequently used items in bulk (provided they won't spoil), and buy more whole and fewer prepared foods when possible (they're usually much cheaper).

10. Consider Consolidating.
If you're carrying high interest debt and it's a viable option under your circumstances, consider getting a debt consolidation loan to greatly lower the amount of interest you're paying out on the balance owed. Lowering 20% interest rates on credit cards to consolidated rates as low as 8% makes for big savings, which can be used to pay off the principle on your debts faster still.