Driving down the highway, on occasion I’ll spot a bumper sticker on the car in front of me announcing ‘I owe, I owe so off to work I go’. You’ve probably seen it, too. This, of course, is a play on the classic Disney movie, ‘Snow White and the Seven Dwarfs’, and the dwarfs’ song of ‘Hi ho, hi ho, it’s off to work we go’. As I look at the sticker, besides thinking immediately of Snow White, I always wonder if the car’s driver thinks having debt is something cute or something of a joke.

To be sure, debt is no joke. Nor, is there anything cute about it. Debt overload is a blood sucking, killer of the spirit. If you get yourself into a situation where everything you earn is paid to creditors, you may be one paycheck away from bankruptcy. The loss of a job can snowball into the loss of a home, car and credit standing. Even a minor emergency can be devastating if you’re a slave to debt. Having so much of your money going out the door to support creditors that you’re living hand to mouth is not living. It’s no more than survival. And, before you can start increasing your savings amount so you can retire, you must pay off your non-mortgage debt and not accumulate more. But, how do you get rid of the debt monster?

Decades ago as a young loan officer at a bank, I met a couple who wanted to take their children to Europe the following summer. They didn’t come to me for a loan. They wanted to know how they could come up with the money to go to Europe without taking out another loan. Maybe they could find the money by consolidating all their loans. It took no more than a few minutes for me to recognize this couple’s circumstance was dire. No matter how you looked at it, they wouldn’t be going to Europe any time soon. They were buried in debt, living paycheck to paycheck. They already had a second mortgage, something almost unheard of at the time, the purpose of which was to consolidate their earlier load of debt. Being in the business of putting people in debt, over their protests, I sent them to a debt counselor. Sometime later, I saw the debt counselor. She told me how shocked this couple was to find they had to sell their boat and trailer, the pick up truck purchased to haul the boat and trailer and one of their cars just to avoid financial disaster. And, to get out of other unnecessary debt, the wife should find a job. They left their first meeting with her angry and mumbling how they knew how to handle their money. A personal emergency, for which they had no funds, brought them back to her and reality. Sad story. And, this was prior to people having multiple credit cards in their wallets! Unfortunately, this is a story that’s still being played out today all over America. People who want a certain lifestyle without thinking about the result. If you’re in a similar circumstance, the first step toward freeing yourself is to admit you’re here. Even if your situation isn’t severe but you just want to save more, taking personal responsibility is the first step in creating a new reality for yourself.

Once you decide to be accountable for the situation you created, you free yourself to make a plan to pay off your debt. If you’ve been reading my blog everyday, you already know we did things contrary to what the financial experts recommend. That’s because we didn’t know any better at the time. So, we started saving first. Then, we paid off debt using bonuses, tax refunds and anything else we could lay our hands on. But, we took action, which is required for changing any situation.

So, what do the experts recommend? Take your smallest debt and pay that off first. Then, once that loan is paid off, take the monthly payment on that loan and apply it to the next smallest debt and so on and so on until all your loans are paid off. Cut up the credit cards! We shredded every card but one, which is all we carry today. Since just about every business takes all the major cards, there’s no reason to carry several cards, other than to continue to keep yourself in slavery to the credit card companies. You don’t need store credit cards, either, because they take all the major cards. Place a moratorium on new purchases. Live with the same household goods, cars and clothes until all debt is paid off. If you have toys like boats, RV campers, motorcycles or extra cars, consider selling them to pay off debt. Clean out the garage, attic and basement and either hold a garage sale or go to that giant flea market on the web, eBay, and sell the stuff collecting dust. Look at your payroll taxes. You really don’t want a refund from Uncle Sam or your state. The country may need you to float them a loan, but you need the use of your money today. So, look at the tax tables and your deductions and make any adjustments necessary to avoid over paying by too much.

Just like your budget, making a debt reduction plan is the easy part. Sticking to it takes WORK! It takes discipline and commitment. It takes a new mindset. And, above all, it takes action. I recently made a $64 purchase at a store using my debit. The clerk enticingly told me how I could save 10% today if I signed up for the store’s credit card. She even threw in a big smile! Nice try but NO, NO, NO! You already know they want you to run up charges on that card, only pay the minimum payment each month and, if you do, they’ll get their 10% back and a boatload more in interest. And, if you really mess up and pay late, they can tack on up to a $25 late charge. So, smile back and say, “NO, thank you”. And, take that bumper sticker off of your car.