William here, with another issue of the Debt Reduction
Academy newsletter.

This week's article is:

===> Is Your Get-Out-Of-Debt Plan Working? Or Do You Even
Have One Yet?

I had several people email me this week, wondering if they missed last week's issue of the newsletter.

If you wondered the same thing the answer is no, you didn't miss it - I did.

We've had a flu bug work its way through everyone in the house over the last two weeks, and we're just getting back on our feet now.

I guess it's one of the things you just have to deal with when you have kids in school, exposed to who knows how many other kids with various bugs.

Everybody's pretty much back to full strength now though, and trying to get caught up on two weeks worth of downtime!

So this week's newsletter is coming a day late, but everything will be back on schedule for next week.

William

IN THIS ISSUE:

1) Sponsor advertisement:
2) Reader Q & A
3) Announcements
4) Main article: Get Out Of Debt Plan: Do You Have One In
Place?
5) Newsletter archives

++++++++++++++++++++++++++++++++++++++++++++++++++++

1. SPONSOR ADVERTISEMENT

There Is No Financial Bail-Out From The Government
For YOU. All The Turmoil On Wall Street Is A Good
Reminder That We Need To Take CONTROL of OUR OWN
FINANCIAL SITUATION

If you can pay all your bills on time now (even though
there might not be anything left), then you are about
to be shown a ridiculously simple plan that can
virtually guarantee, with only a tiny bit of discipline,
that you will be completely free of debts in 10 years
or less including your mortgage.

Protect yourself from the next economic downturn by
making smart choices today.

Learn more at:

http://www.debtreductionacademy.com/leoquinn.html

++++++++++++++++++++++++++++++++++++++++++++++++++++

2. READER Q & A

This week's question:

Hi, Im a student, and in a moment of lapsed judgement I applied for a credit card which I thought I needed, but now have realized I really don't need the extra debt! I will be able to manage without it and i wondered if when it arrives (in a couple of days) I can send it straight back without having used it? Will I be charged for this? Can I just cut it in half send it back and ignore it or is this wishful thinking?

Sending it back isn't the way to handle it. Just call the customer service number for the card and tell them you want to cancel the account. You shouldn't have to send the card back at all, just make sure you cut it up or shred it once it's canceled.

You should also request a final statement or some other written confirmation that the account has been canceled, just so you have some proof if they ever try to bill you for anything in the future.

If you haven't used the card, the only thing you'll need to pay is any fees that they charged when you signed up. If there's no annual fee on the card, you shouldn't have to pay anything.

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3. ANNOUNCEMENTS

ONE: Follow me on Twitter

http://www.twitter.com/debtsmackdown

That way, if you don't get my emails for some reason, you'll
get my Twitters.

TWO: The newsletter archives are up

I've got some of the previous newsletter issues posted on
the website and the rest will be available soon. The link
and more details are at the end of this issue.

THREE: Do you have a question?

Do you have a burning question that you'd like me to answer
in this newsletter?

You can submit your questions through the website here:

http://www.debtreductionacademy.com/contact.php

I can't promise a personal response, but I'll do my best to
answer your questions in a future issue of the newsletter.

++++++++++++++++++++++++++++++++++++++++++++++++++++

4. FEATURED ARTICLE

Get Out Of Debt Plan: Do You Have One In Place?

Everyone wants a good "get out of debt plan", well here's how I did it…

Over the course of about 10 years, I racked up over $100,000 in debt - mostly on credit cards or loans I took out to pay off those credit cards. So believe me when I tell you that I understand what it feels like to be buried under debt and looking for a plan to get out.

I spent hundreds of dollars and a great deal of time looking for the "perfect" plan to get out of debt. Particularly one that would help me do it as fast as possible.

Looking back, my expectations were unrealistic - I wanted a "magic button" that I could press and all my debt would be wiped away.

Unfortunately, the world doesn't work that way. But in the process of looking for that quick fix, I did manage to learn enough to get myself out of debt a lot faster than I ever thought possible. It just took more work than I was hoping.

But don't get me wrong - it's a simple process, really. But that's not to say it's *easy* - you'll need to put in some effort (but nothing that you can't handle, I promise).

I'm going to give you the "10,000 foot view" of my system.

So let's get started…

The system is basically made up of three steps.

1. Take Stock Of Your Finances

You need to figure out what you owe, to whom, and by when. This sounds simple, but it's amazing how many people have a pile of debt and don't really know exactly how much they have.

I suppose it's partly due to the "ostrich" mentality - hide your head in the sand and hope it goes away. But the first step to getting out of debt is to determine exactly what you owe.

2. Determine What You Can Pay

The second step in the process is to figure out exactly how much you can pay toward your debt every month. Again, easier said than done.

Most people just work through the pile of bills from the top down, and pay what they can on each one. There's no real plan in place, and they just go until the bank account is empty or even overdrawn.

You need to do a little work and figure out exactly what you can pay - and 99 out of 100 people find money they didn't know they had as part of this step.

3. Create Your Plan and Stick With It

This is by far the most important component of the system. If you don't create a plan and take action on it, nothing else matters. You're just going to stay where you are today.

By laying out a specific plan of attack, you're putting yourself in control of your debt instead of the other way around. And by sticking with it, even if it is tough sometimes, you'll be sure to reach your goal of being debt free.

++++++++++++++++++++++++++++++++++++++++++++++++++++

5. NEWSLETTER ARCHIVES

I'm in the process of getting all the previous issues of the
newsletter posted on the Debt Reduction Academy website. I've started posting recent issues and will have all the earlier ones up soon.

You can find them here:

http://www.debtreductionacademy.com/articles/category/newsletter-archives

A lot of the questions I get from people are repeated over
and over. If you've got a question, I might already have
answered it in a previous issue, so go and check it out.

Copyright 2009 Nichescape Publishing Inc.

William here, with another issue of the Debt Reduction Academy newsletter.

This week's article is:

===> Debt Consolidation: A Helpful Way To Lower Your Interest Rate and Payments or An Easy Way To Lose Your Home?

This week marked a historic day in the history of the United States - the inauguration of Barack Obama as president.

Whether you agree with his politics or not, you have to admit that the event was quite a spectacle, one that many people will tell their grandchildren about.

But once the shine wears off, President Obama has plenty of issues to address. The general feeling over the last few months seems to have been one of optimism, but I can't help but wonder how soon people will start to turn on him if he doesn't get things fixed quickly.

The economy is a big one, and I don't think it's going to be an overnight turnaround. Obama seems to have been preaching patience, that things won't change right away, but I wonder how many people truly heard that message.

The next few months will be an interesting time.

William

IN THIS ISSUE:

1) Sponsor advertisement:
2) Reader Q & A
3) Announcements
4) Main article: What Is Debt Consolidation Really Going To Cost You?
5) Newsletter archives

++++++++++++++++++++++++++++++++++++++++++++++++++++

1. SPONSOR ADVERTISEMENT

Would you like to live a greener, more environmentally friendly life and save money at the same time?

In spite of what you might think, both are possible.

Find out how you can do it on the How Can We Go Green website:

http://www.howcanwegogreen.com

++++++++++++++++++++++++++++++++++++++++++++++++++++

2. READER Q & A

This week's question:

Which is better - paying off one credit card fully (eg. paying off a $2000 balance) and closing the account or partially paying off another credit card (eg. paying off $2000 of a $4000 balance) with the intention of closing the account once it's fully paid? Which option would save me more money?

If saving money is the primary concern, you should put the money on whichever card has the highest interest rate. Whether it's the one that would be completely paid off or not, this is the option that's going to cost the least.

If you would rather get one paid off and then start tackling the other, pay off the one that you can pay the full balance on.

If you pay off the one that you can clear the entire balance, you shouldn't cancel it, at least until you pay off the other one as well. If you do, your credit score will either go down or it won't go up which it would if you left the card open.

Part of your credit score calculation is based on the balance you have on your credit cards versus the total credit that's available to you. If you cancel the card that is fully paid off, this ratio goes up which causes your credit score to drop.

eg. Using your examples, you have $6000 of outstanding credit, with at least $6000 total credit available (assuming both cards are maxed). So you have 100% credit usage. If you pay off $2000 of the debt, you now have $4000 outstanding on $6000 total available, or 67% usage. Canceling the $2000 card would keep you at 100%.

Cut up the card so you can't use it, but keep the account active.

++++++++++++++++++++++++++++++++++++++++++++++++++++

3. ANNOUNCEMENTS

ONE: Follow me on Twitter

http://www.twitter.com/debtsmackdown

That way, if you don't get my emails for some reason, you'll get my Twitters.

TWO: Do you have a question?

Do you have a burning question that you'd like me to answer in this newsletter?

You can submit your questions through the website here:

http://www.debtreductionacademy.com/contact.php

I can't promise a personal response, but I'll do my best to answer your questions in a future issue of the newsletter.

++++++++++++++++++++++++++++++++++++++++++++++++++++

4. FEATURED ARTICLE

What Is Debt Consolidation Really Going To Cost You?

Consolidation is one of the most talked-about ways of dealing with debt. You'll see offers from lending companies, credit cards and even your bank, suggesting you take out a loan to pay off all your existing debts, combining them into a single payment with a lower interest rate in some cases. But the question is, is this a good idea? It sounds like it, but what is debt consolidation really going to cost you?

There are several things you need to consider before signing up for any kind of debt consolidation loan.

Are You Really Going to Be Saving Money?

If you are consolidating credit card debt, chances are you'll be paying a lower interest rate on your consolidation loan than you are on the credit cards themselves.

But a lot of consolidation loans require you to combine all your debt - not just credit cards - so you might have to include other loans which may have lower interest rates.

If this is the case, you need to determine whether or not what you save on the credit card debt is going to be lost on the rest of the loans you're consolidating.

How Long Will You Be Paying?

When you take out a consolidation loan, you're going to be starting from square one and will have that loan for whatever term you sign up for.

Again, if you're combining existing loans into the consolidation, you could end up paying them off for a lot longer than is left on the original loans.

For example, if you have a loan that has 12 months left before it's paid off and you consolidate it along with the rest of your debt, using a 48 month consolidation loan, you're going to be paying interest on that debt for an extra 36 months.

Even if the interest rate is lower, you'll likely wind up paying more interest in the long run.

What Are You Putting At Risk?

This is one of the biggest problems with most debt consolidation programs - what you're putting at risk.

Credit card debt and other consumer debt is generally unsecured. That means that there is nothing "backing" the loan for the creditor to repossess if you don't pay the debt.

This is the opposite of secured debt, which is usually things like your mortgage or your car loan. If you stop paying, the lender can foreclose on your home or repossess your car to recover their money.

When you take out a consolidation loan, they are often secured by some kind of collateral, most often home equity. These home equity lines of credit (HELOC) are essentially another mortgage on your home. If you can't pay, they can foreclose on your home.

By doing this, you're essentially taking unsecured debt and converting it to secured, putting your home at risk. If you ever lose your job or suddenly can't pay the debt for some reason, your home will be on the line.

Debt consolidation can work for some people, but in most cases there are more risks involved than there are advantages.

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5. NEWSLETTER ARCHIVES

I'm in the process of getting all the previous issues of the newsletter posted on the Debt Reduction Academy website.

Once they're posted, I'll include a link here in the newsletter.

A lot of the questions I get from people are repeated over and over. If you've got a question, I might already have answered it in a previous issue, so you'll be able to check soon.

Copyright 2009 Nichescape Publishing Inc.

William here, with another issue of the Debt Reduction
Academy newsletter.

This week's article is:

===> The Real Cost Of Using A Credit Card Debt Service To
Get Rid Of Your Debt For You - And Why You Should Think
Twice (At Least) Before Using One

Fox News released the results of an interesting poll
yesterday. According to this poll, 80% of Americans think
that debt - both government and personal - is ruining the
country's economy.

It's interesting that while so many people think it's doing
more harm than good, the "stimulus packages" and bailouts
continue.

Personally, I think if we continue to bail out companies and
people who make bad decisions, and continue to extend more
and more debt, we're just digging a deeper hole. We're
facing the consequences of the last several years now, so
where are we going to be in several more if these things
continue?

What about you? How do you feel about how the government is
handling the current situation (and it's not just the US
government, it's happening around the world)?

I have a feeling things are going to get worse before they
get better…

William

IN THIS ISSUE:

1) Sponsor advertisement:
2) Reader Q & A
3) Announcements
4) Main article: #Normal Title#
5) Newsletter archives

++++++++++++++++++++++++++++++++++++++++++++++++++++

1. SPONSOR ADVERTISEMENT

Would you like to live a greener, more environmen-
tally friendly life and save money at the same time?

In spite of what you might think, both are possible.

Find out how you can do it on the How Can We Go
Green website:

http://www.howcanwegogreen.com

++++++++++++++++++++++++++++++++++++++++++++++++++++

2. READER Q & A

This week's question:

Should I withdraw money from my 401k to pay off
high-interest debt like credit cards?

Generally, it's not a good idea. There are several reasons
for this:

First, with the way the market has been over the past
several months, if your 401k is heavily invested in stocks,
chances are pretty good that it has lost value. As long as
you leave the money in the 401k, that loss is only on papert.

As soon as you withdraw money from the 401k, any losses that
you've accumulated become "locked in" because that money is
no longer able to increase in value.

If you have more than 5 years until retirement, it's almost
guaranteed that you will make back any losses that you've
experienced as the market rebounds.

Second, when you withdraw money from your 401k, you have to
pay income tax on that withdrawal since it's effectively
"income". You may also have to pay withdrawal fees,
depending on how your 401k is set up.

That means that you'll actually have to withdraw
considerably more than what you need to actually pay off
your debt, possibly up to twice as much if you're in a high
tax bracket.

And finally, when you withdraw money from your 401k, you're
going to lose any future earning potential of that money.
And you probably won't be able to "replace" it down the
road. If you're a long way from retirement, this can be a
significant amount lost.

++++++++++++++++++++++++++++++++++++++++++++++++++++

3. ANNOUNCEMENTS

ONE: Follow me on Twitter

http://www.twitter.com/debtsmackdown

That way, if you don't get my emails for some reason, you'll
get my Twitters.

TWO: Do you have a question?

Do you have a burning question that you'd like me to answer
in this newsletter?

You can submit your questions through the website here:

http://www.debtreductionacademy.com/contact.php

I can't promise a personal response, but I'll do my best to
answer your questions in a future issue of the newsletter.

++++++++++++++++++++++++++++++++++++++++++++++++++++

4. FEATURED ARTICLE

The Hidden Costs Of Credit Card Debt Services

Credit card debt services offer to help you negotiate better
deals with the credit card companies, settle your debts, and
various other things. They sound like they are a good way to
deal with debt, but that isn't always the case.

There are several potential problems that you can run into
when using these services. Let's look at a few of them…

It Can Impact Your Credit Score

When these services contact your credit card company, they
will often put a note on your credit report about the
situation. This can cause your credit score to drop, and can
also cause you to be declined for other items because they
are there.

It Can Cost You More

Many of these credit card debt services work by taking a
lump-sum payment from you and then distributing it to all
your credit card payments.

If they don't make the payments on time, you can wind up
paying more in interest costs as well as late fees that get
added to your next bill.

Because you are not in control of these payments, you are
not able to manage them as effectively.

It Can Lead To Legal Issues

You can still be sued when using a debt settlement company
to handle your debt. Unlike bankruptcy, it does not give you
any kind of legal protection so you are still at risk of
being sued.

Tax Consequences

If the debt service manages to get some of your debt
canceled for you, it can have tax implications. You will be
taxed on the amount that is canceled, as it is essentially a
form of income for you.

As you can see, there are a number of potential issues when
dealing with a credit card debt service. Before taking that
step, you should always ensure that you have taken all the
steps possible to get your debt under control yourself.

++++++++++++++++++++++++++++++++++++++++++++++++++++

5. NEWSLETTER ARCHIVES

I'm in the process of getting all the previous issues of the
newsletter posted on the Debt Reduction Academy website.

Once they're posted, I'll include a link here in the
newsletter.

A lot of the questions I get from people are repeated over
and over. If you've got a question, I might already have
answered it in a previous issue, so you'll be able to check
soon.

Copyright 2009 Nichescape Publishing Inc.

Unfortunately, a large number of those life decisions are practically forgotten in the following 12 hours, by 9pm on January 1!

Well, it may not be quite that bad but the vast majority of New Year's resolutions are set aside or forgotten by the end of January.

If you've made a resolution to get out of debt this year, what can you do to make it stick for more than a few weeks?

There are several things you need to do to have a successful New Year's resolution…

First, you need to be realistic. If your debt has been accumulating for several years, you can't expect it to disappear overnight. What starts as a New Year's resolution in 2009 might continue as one in 2010, 2011 and beyond.

You can't let this discourage you from sticking with it though. You just need to accept this fact from the start.

Second, you need to have a plan. Waking up on January 1 and saying "I'm going to get out of debt this year" is not enough. You need to figure out how you're going to reach that goal, and how long you should reasonably expect it to take.

Third, you need to take action on that plan. This is really the key to the whole thing - without action, nothing is going to happen. In spite of what you might hear in books or movies like "The Secret" simply wanting or expecting something is not enough. You need to take action to get it.

Finally, you need to review your progress on a regular basis and make adjustments to your plan when necessary. Let's face it - unexpected things are going to come up whether you like it or not.

Your car might break down, the roof springs a leak or your stove packs it in and has to be replaced. These things can set your get-out-of-debt plan back, but you need to take them in stride and not let them completely derail your efforts.

If you want to start fresh this year and really get your debt paid off, you can do it. You just need to be sure to lay a good foundation under your resolution so it isn't going to fail as soon as the novelty wears off.

For the most part, the information in the Debt Reduction Academy training will apply to anyone, no matter where you live.

There are some things however, such as the article in this issue of the newsletter about the Fair Debt Collection Practices Act, that are only applicable to people living in the United States.

In most cases, there will be an equivalent of some sort in your country, but since I'm not familiar with the rules and regulations everywhere I generally can only talk about the US.

But as for getting out of debt, the principles are the same no matter where you live or what currency you're dealing with.

The bottom line is, debt is debt - getting it paid off is a universal strategy.

These calls can sometimes be a little annoying, like when you answer your phone and there's a recorded message either telling you to hold for an operator, or to call them back at a certain number to follow up something "about your account".

Other times, these calls can be downright harassing, with the collection agency making all kinds of threats.

Fortunately, there are laws in place that give you certain rights when dealing with debt collectors.

The Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 to put a stop to some of the really scummy practices of debt collectors.

There are a number of things that the act specifically addresses, including:

• Hours for phone contact: Debt collectors are not allowed to contact you outside the hours of 8:00am to 9:00pm, local time.
• Stopping communication: Debt collectors must stop calling you or otherwise contacting you upon receipt of written notice that you do not wish to have any further contact made. Note that there are certain exceptions to this, such as advising you that collection efforts are being terminated or that the collection agency is filing a lawsuit to pursue the debt. But you should not receive any further phone calls or other contact attempting to collect the debt.
• Publishing your contact information on a "bad debt" list: This is prohibited by the Act.
• Threatening arrest or legal action: They cannot make threats of this sort that are either not permitted or that they are not actually considering. In other words, it can't be used as a form of intimidation.
• Annoying, abusing or harassing you by phone: They are not allowed to call you repeatedly or continuously, with the intent to annoy or harass you.

If a debt collector breaks any of the rules set out in the FDCPA, they can be fined by the FTC and/or sued by the consumer.

If you feel you are being hassled unfairly by a debt collector, you can get them to stop. This doesn't erase the debt, and you're still going to have to repay it or face the consequences, but it can ease a lot of the stress of getting phone calls and other contact from them constantly.

The complete text of the FDCPA is available from the following website if you want to see all the prohibited behaviors and potential damages for violations:

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

Has the current financial crisis got you thinking more seriously about your debt and what you can do to minimize your risk? Believe me, you're not alone - this is one of the most important things on a lot of people's minds right now, both in the US and around the world.

I'm worried about this financial meltdown. How
can I get my debt paid off to reduce my risk?

As I write this, the U.S. Government is frantically trying to bailout Wall Street after they extended themselves way too far. Just yesterday, the House Republicans rejected the bill that was supposed to offer a solution - to the tune of $700 Billion dollars to bail out Wall Street.

UPDATE: The government did wind up passing that bailout bill. But the jury is still out on whether it's going to fix the problem. The stock market has been all over the place and you can find "experts" on both sides of the fence. You probably don't want to sit back and wait for this bailout plan to fix everything for you - create your own "bailout" plan so you don't need to worry!

$700 Billion dollars! That number is too big for most people to even really understand.

I sure can't imagine that much money…

Regardless of what happens though, this financial crisis has made people realize that there is no such thing as a free lunch.

So many people are overextended, carrying more debt than they can really afford and now that the banks are in trouble, they're going to be tightening up on their lending habits.

Where is that going to leave you? If your bank suddenly decided to call in your debt, what would you do? Do you have a plan in place?

If not, you're not alone.

I'd be willing to bet that 99% of the people who are carrying debt such as credit cards, lines of credit and other high interest consumer debt would have no way out other than foreclosure or bankruptcy if they suddenly had to repay everything they owe.

Whether this current crisis has you worried or not, now is the time to get serious about paying off your debt and taking control of your financial health.

With the way the economy has been going the last few weeks, I've been getting a lot of emails similar to this one. People are really starting to worry about having too much debt, now more than ever.

Does that ring a bell?

Well, to respond to today's question, I've got some bad news and some good news (and some even better news!)

First, the bad news. Chances are pretty good that you're right to be worried about how your debt is going to affect you. Banks and other lenders are feeling the crunch, and they're really tightening up on the money they lend.

Second, the good news. The good news is that I'm going to share my entire Debt B.A.I.L.O.U.T. System in abbreviated form in this Q & A session. You won't need to buy a thing, just keep reading the article below.

Third, the even better news. At the close of our Q & A session today, I'm going to explain how you can get your hands on the original Debt Reduction Academy training in its entirety. (That's right, all 26 lessons, mindmaps, checklists, worksheets and more!)

So let's go ahead and get started, shall we?

The 7 Step Debt B.A.I.L.O.U.T. System

No matter what kind of debt you're dealing with, whether credit card debt, car loans, personal loans, or anything else, the same principles apply to getting it paid off.

When you're dealing with high interest debt such as credit cards, it's often due to poor spending habits. But what's done is done, so there's no sense wishing you had done things differently in the past.

The key is to understand what got you to where you are, and what you need to do to get it paid off.

The Debt B.A.I.L.O.U.T. System is made up of the following steps:

B - Become Aware
A - Act After You Think
I - Itemize Your Spending
L - Leave The Doodads Alone
O - Only The Necessities
U - Undo Bad Habits
T - Take Action

In the rest of this lesson, I'll explain each of the steps. So let's get started…

B - Become Aware

The first step to getting out of debt is to become aware of exactly what got you into debt and what is keeping you there.

It's so easy to spend money you can't really afford. After all, that's what the credit card companies have been telling us for years…

"Don't worry if you don't have the cash, just charge it and get the instant gratification that comes along with having that thing that you want."

But there's always a consequence, and having to pay off that debt is the big one when it comes to credit cards. While you make payments for months or even years, the credit card companies are filling their pockets with all the interest you're giving them.

Want to try an interesting experiment? For the next 7 days, make a conscious effort to see beyond the clever ads and the sincere-sounding pitchmen on TV and take note of all the ways the credit card companies, banks and other lenders convince you to spend money you don't have.

Stop listening to the "apparent" message and start listening to the "hidden" one. You'll soon start to see these ads for what they really are - a come-on to make you spend money you don't have, so you can pay the lenders interest for as long as possible.

A - Act After You Think

Part of the reason for the current financial crisis in this country is the way we have all been conditioned to overspend and "just charge it".

I mean, let's face facts here - the banks wouldn't have overextended themselves if there weren't all those people who wanted the sub-prime mortgages and other things that brought about this problem.

They couldn't have got themselves into this trouble without customers willing to take them up on these offers!

The bottom line is that you need to start to act after you think things through. It may be a cliche, but the old saying "If it seems too good to be true, it probably is" almost always proves to be accurate.

If you can buy everything you want today, without having the money for it, and all you need to do is pull out the plastic, don't you think there's going to be a catch?

In this case, the catch is that you're going to be paying interest - a lot of it, maybe as much as 28% - to the credit card company or whoever is lending you the money.

Before you buy something on credit, sign up for a zero-interest offer for new furniture, or take out a home equity line of credit, think about the possible consequences first.

• Can you pay it off before the interest kicks in?
• What happens if you can't make your payments for some reason?
• Do you really need another doodad, or would you be better off saving that money?

I - Itemize Your Spending

Do you have a household budget that gives you a roadmap for your spending every month?

No? Don't worry - you're not the only one.

I've met far more people who don't budget their spending than those who do, and a lot of those people don't just not do it - they absolutely hate the idea.

Believe me, I used to be one of them

I always thought that a budget would limit what I could do, and I'd either be tied down every month or I'd feel like a failure when I overspent my budget in some area.

But once I got started, I realized how much it helps to stop overspending and to see where your money is going.

Itemizing your spending (and your income) will help you identify things that you spend too much on, and things that you don't spend enough on (such as paying off your debt!)

And don't worry if you don't get it perfect in the first month. It's taken you a lot of years to create your current spending habits - don't expect them to change overnight.

L - Leave The "Doodads" Alone

Have you ever read Robert Kyosaki's book "Rich Dad, Poor Dad"? In it, he calls things like new clothes, the latest tech gadgets and new cars "Doodads".

In other words, things you don't really need but think you want because of some great sales pitch or because the neighbor up the street has one.

And these doodads are where most people overspend and get themselves into debt.

One of the keys to getting control of your debt is to stop buying these doodads and quit wasting your money.

Besides, let's face it - if you're like most people, you've probably got plenty of doodads already, most of which you rarely, if ever use!

O - Only The Necessities

This step is closely related to the last one. Stick to the necessities - no spending that isn't absolutely necessary.

This includes the "doodads" I mentioned in the last step, but it also includes little things that eat away at your money.

Things like that daily cup of coffee from Starbucks, for example. Sure, it's only a couple of bucks for the coffee but if you pick one up only three times a week, it costs you $5 to $6 per week.

That's $260 to $312 per year, which is a sizeable extra payment on your debt!

Sticking to the necessities can also mean things like buying generic brands instead of name brands when you're shopping. There are cases where you won't want to skimp, but there are plenty of things that you can buy in generic form that are every bit as good as the "brand name" sitting beside it on the shelf (often for twice the price).

Revealed: I've got a simple little technique that you can begin using right now to find money for an extra payment on your debt at the end of this month. (I first shared this in my 5 Day Email Course Operation Money-Find: How To Find Money To Start Paying Off Your Debt This Month. Click here to find out how to get your own free copy.)

Here it is: For the next 7 to 14 days, make a list of everything you spend money on. It doesn't matter if you use cash, credit card or debit card, it goes on the list.

Once you have a few days worth, go through the list and find all the things that are not absolutely necessary. Add up how much you spent on it over the course of a week.

Pick as many as you can manage, and stop spending your money on them. Put that money aside for the end of the month, when you're making your bill payments. Now take all that found money, and make a payment on one of your bills.

Sounds too obvious? I'm telling you the truth, this one single tip will cut years off your debt if you put it into action.

Now, having said all of that, in lesson two of the Debt Reduction Academy, I'm going to share 13 simple ways to find extra money every month.

I've worked with people who have come up with as much as $437 that they could use to pay off debt at the end of the month - and every month from then on.

I'll share those tips and how YOU can use them to make an extra payment on your bills every month until they're paid off.

Now, onto the "U" of our system…

U - Undo Bad Habits

This step is probably the most important of the whole process, and I'll be honest with you - it's also the most difficult.

If you've spent years building up certain spending habits, you can't expect them to change overnight.

As motivated as you might be to get your debt paid off, you're
going to find yourself naturally drawn to the things that
you've been doing that got you to where you are today.

One of the keys to changing your habits is to become more aware of the bad ones that you want to replace. If you are conscious of the problem, you're more likely to catch yourself when you start to fall back into those old patterns.

Studies have shown that it takes anywhere from 20 to 30 days of practicing new actions to make them become a habit. So don't get discouraged if you find it hard to stop doing things you shouldn't with your money. Just realize that's part of the process, and continue to work on making your new money habits your first response.

To start changing your bad habits, you should sit down and make a list of any habits or beliefs that you think might have helped get you into debt. Then make a list of the habits that you think you should replace them with to make a positive change.

Read through your list every day until you have replaced the bad habits with the good. This will help you to be more aware of them, and you'll be a lot more likely to catch yourself if you slip back into your old patterns.

I believe that creating new habits and getting rid of the bad ones is such an important piece of the puzzle for getting out of debt that I have dedicated an entire lesson in the Debt Reduction Academy (Lesson #15) to helping you "program" your brain to get rid of those old habits and make the new ones your first reaction, automatically.

Okay, so let's move on to the final step in the system, the letter "T"…

T - Take Action

I said the last step was probably the most important. Well, let me correct that statement - this step is actually the MOST important. Until you take action on all the steps in this process, absolutely nothing is going to happen.

Taking action is the key to making this whole thing work. And it's easy to say, but not always so easy to do.

Keep the end goal in mind at all times. If you find yourself wanting to give up or buy something you can't really afford "just this once" remember how that is going to affect your Debt B.A.I.L.O.U.T. Plan.

Do whatever you can to help yourself stay motivated to take action.

• Get some pictures of something that motivates you to keep at it. It could be pictures of your kids, the reward you're going to give yourself when you get your debt paid off, or anything else that helps keep you on track.
• Enlist someone to be your "partner" and help keep you accountable. This could be a family member or a friend, or someone you chat with on the internet. Tell them what you're doing and get them to follow up with you on a regular basis to make sure you're sticking with the plan.
• Set up a rewards system for reaching certain milestones (each credit card you pay off, for example) and for getting your debt paid off completely. Just make sure the rewards aren't something that's going to put you further back into debt! There's no sense rewarding yourself with a trip to Hawaii if you need to charge several thousand dollars on your credit card to go.
• Set up a "negative reward" system to keep you accountable. For example, tell a friend or your kids that if you "fall off the wagon" you're going to give them $50. Next time you reach for the credit card to buy something you can't afford, you'll think about that $50 promise and it will make you reconsider that purchase.

So there you go - I've just handed you the complete system you can use to get yourself out of debt. I call it the Debt B.A.I.L.O.U.T. System.

The Results Are Worth Getting Excited About!

I've seen some phenomenal results from using the "system". It got me from over $100,000 in debt to completely debt free, and it has worked for many other people as well.

If you'd like to find out more about the full Debt Reduction Academy training, including all 26 lessons, the checklists, the mindmaps, the worksheets and much more, visit the Debt Reduction Academy main page.

Or if you'd like to get hold of your own copy of my 5 day mini course "Operation Money-Find: How To Find Money To Start Paying Off Your Debt This Month" just enter your name and email address into the space below.

* Every effort has been made to accurately represent this course and its potential. Please remember that each individual's success depends on his or her background, dedication, desire and motivation. As with any financial endeavor, there is no certain guarantee that you will experience the same results as others have.

Chances are pretty good that you've asked that same question yourself. Sure, maybe not to me but you've probably asked someone, sometime. At the very least, you've wondered about it to yourself.

How can I get out of debt?

Let me suggest an even better question: How can I get out of debt QUICKLY?

The fact is, anyone can get out of debt. I mean, if you only make the minimum payments on your credit cards and other debts, you'll eventually get out of debt.

The trouble is, that will take you years, even decades to become debt free.

But that just isn't good enough.

You need to do more than just get out of debt - you need to get out of debt quickly.

So what do you say we start with that as our goal.

In this article, I'm going to share my nine step system for getting out of debt AND doing it quickly.

But first, let's look at the full question I'm going to answer in today's Q & A session…

These kind of emails are pretty typical of the kind of messages I receive regularly. People realize they need to get their debt paid off, but they just can't see the light at the end of the tunnel.

Does that ring a bell?

Well, to respond to today's question, I've got some bad news, some good news and some even better news.

First, the bad news. The bad news is that the lenders who you owe money aren't interested in what's best for you. They'd like nothing more than to have you paying them for as long as possible, since they'll be making lots of interest off your debt.

Secondly, the good news. The good news is, I'm going to share the entire nine-step system in an abbreviated form in this Q & A session. You won't need to buy a thing, just keep reading the article below.

Thirdly, the even better news. At the close of our Q & A session today, I'm going to explain how you can get your hands on the original Debt R.E.D.U.C.T.I.O.N. System in its entirety. (That's right, all 26 lessons, mindmaps, checklists, worksheets and more!)

So let's go ahead and get started as I share a simple system for getting your debt paid off faster, with much less interest paid.

Here's How To Get Your Debt Paid Off In Nine Steps

"Loans and debts make worries and frets."

Have you ever heard that saying? Chances are you have heard it or something like it many times.

In fact, if you had a dollar for every time you heard something like that, you might not have to worry about your debt now!

However much of a cliche it is, it IS a truthful statement. Loans and debts REALLY DO make worries and frets - and just increase your stress level in general.

The simple fact is, if you're dealing with a pile of debt, the chances are pretty good that you are stressed out and looking for a way to end your stress.

Getting out of debt has many parts. Consider words like "budgeting", "saving", "overspending", "credit cards", "consolidation", "counseling", "debt management", "debt settlement", "negotiation", along with a pile of others, and it's easy to see why people get stressed out and don't know where to start.

There are many parts to getting out of debt, but I believe there is only ONE system. So it's not "my" system - it's THE system. People who get their debt paid off and free themselves from the stress all use the same basic system. Some might do it better than others, but they all follow pretty much the same process.

I'm going to explain this system to you in my own proprietary way that no one else on the planet uses. And as we go through each step, I'll discuss them and share some tips that are also exclusively mine.

I call this system the "Debt R.E.D.U.C.T.I.O.N. System" and I used it myself to pay off over $100,000 in debt, more than half of which was on credit cards. (Yes, there are five zeroes in that number!)

If you can master these nine steps, you CAN and WILL get your debt paid off sooner than you think. And think about how nice it would be to wake up one day knowing that all your debt is paid, and you are finally free.

The components of the Debt R.E.D.U.C.T.I.O.N. System are…

R - REALIZE there's a problem
E - EDUCATE yourself
D - DECIDE to get out of debt
U - UNDERSTAND what got you into debt
C - CREATE a plan of attack
T - TAKE action
I - INVITE challenges
O - OVERCOME obstacles
N - NEVER get into debt again

In the rest of this lesson, I'll explain each of these nine steps. So let's get started…

R - REALIZE there's a problem

The first step to getting out of debt is realizing that there's a problem.

I know it sounds obvious, but a lot of people don't connect the fact that they're in debt with the problem that led to it.

For most people, the problem that led to being in debt is overspending, plain and simple. The credit card companies do a very good job of convincing us that we should just charge the things we want but can't really afford.

People get accustomed to instant gratification and start charging more and more. Until the debt catches up with them, at least.

The fact that you're reading this means you've probably already realized that there is a problem that you need to solve, but you need to really look at what led to your debt and identify the problem if you hope to avoid it in the future.

E - EDUCATE yourself

Step two in the Debt R.E.D.U.C.T.I.O.N. System is to educate yourself about debt and money.

This doesn't mean you need to spend 4 years in university to get a degree in finance. It simply means you need to learn how debt really works.

You need to understand the system that's "behind the curtain"…

- The minimum payment trap. How making minimum payments can take you up to 20 years to get your credit cards paid off

- How much things really cost. The real cost of something after you pay all the interest on it on top of the original purchase price.

- How a budget frees you, not restricting you. Most people think a budget limits them, but it's really the other way around. In lesson six of the Debt R.E.D.U.C.T.I.O.N. System I'll talk more about creating a budget that will help you free up your money to pay off your debt faster.

The important thing is to "think for yourself" - don't let the credit card companies and other lenders tell you what you should believe.

That's an important point, so let me say it again in slow motion…

1. Think
2. For
3. Yourself

Getting out of debt is up to you - nobody is going to do it for you, least of all the companies who gave you credit.

D - DECIDE to get out of debt

Step three of the system sounds really, really simple, but it's THE most important part of the whole process.

You need to decide to get out of debt once and for all.

Hoping to get out of debt isn't enough. You need to make a conscious decision to be free of your debt, and stick with it no matter what. Otherwise, you'll be right back where you are now, probably sooner than you think.

U - UNDERSTAND what got you into debt

Step four is closely related to step one. If you want to get your debt paid off, and keep it that way, you're going to have to understand what got you there in the first place.

If you don't understand what got you to where you are today, even if you get all your debt paid off the chances are pretty high that you'll wind up back in debt, wondering what went wrong.

Let me just give you a quick example:

A friend of mine cut back on all the frivolous things in her life, and scratched and saved every extra dollar she could to pay towards her debt. And she managed to get all your credit cards and other debts paid off…

• The first thing she did was "reward" herself for a job well done. You know how? By taking a nice trip, which she charged on her now-clear credit card.
• She also went back to her previous lifestyle, buying things she wanted "now" instead of waiting until she had the money in hand.
• Before she knew it, she was back where she started - in debt and stressed out.

She fixed the problem and got out of debt, but it was only a bandaid fix for the bigger problem.

She didn't truly understand what got her into debt in the first place.

C - CREATE a plan of attack

Step five is where you really start to make headway.

This is where you sit down with everything you've come up with in the first four steps and lay out your plan for getting your debt paid off.

• Your budget
• The problems that led to your debt
• Your goal for becoming debt free
• The changes you're going to make to reach that goal

You'll need to work out exactly how much you can pay towards your debt every month to get it paid off sooner (this is where your budget will come in handy).

This is also the step where you will "find" money that can be used to pay off debt every month, even if you don't realize you have it right now.

Revealed: I've got a simple little technique that you can begin using right now to find money for an extra payment at the end of this month. (I first shared this in my 5 Day Email Course Operation Money-Find: How To Find Money To Start Paying Off Your Debt This Month. Click here to find out how to get your own free copy.)

Here it is: For the next 7 to 14 days, make a list of everything you spend money on. It doesn't matter if you use cash, credit card or debit card, it goes on the list.

Once you have a few days worth, go through the list and find all the things that are not absolutely necessary. Add up how much you spent on it over the course of a week.

Pick as many as you can manage, and stop spending your money on them. Put that money aside for the end of the month, when you're making your bill payments. Now take all that found money, and make a payment on one of your bills.

Sounds too obvious? I'm telling you the truth, this one single tip will cut years off your debt if you put it into action.

Now, having said all of that, in lesson two of the Debt R.E.D.U.C.T.I.O.N. System, I'm going to share 13 simple ways to find extra money every month.

I've worked with people who have come up with as much as $437 that they could use to pay off debt at the end of the month - and every month from then on.

I'll share those tips and how YOU can use them to make an extra payment on your bills every month until they're paid off.

Now, onto the "T" of our system…

T - TAKE action

Step six is where the "rubber hits the road" so to speak.

All of the planning and goal setting means nothing until you take action and put your plan in motion.

You've done the work to learn why you're in debt and identify the habits you need to change. You've made the conscious decision to get yourself out of debt, and you've created your plan of attack.

Now it's time to implement your plan.

For example, let's take a closer look at the technique I shared in the previous step.

You've started to track your spending and identified things that you're spending money on that aren't really necessary. Here's how you take action on that information…

• Take your list of unnecessary expenses and add up the total cost per week.
• Now multiply that amount by four to get your approximate monthly "found" money.
• Choose one of your debts that you want to pay off. I recommend choosing the smallest one, NOT the one with the highest interest rate.
• When you make your payment on that bill at the end of the month, add the "found" money to it.
• Continue to do this every month until that bill is paid off.

Why do I recommend paying the smallest debt first, instead of the one with the highest interest rate?

It's simple, really - when you pay off the smallest debt first, you'll see quicker results. When you get that first debt completely paid off, it's a fantastic feeling.

If you've done any research on debt reduction, you've probably seen people who recommend paying off your high interest debt first, to save more money in interest costs.

While that might make sense from the point of view of someone on the outside looking in, believe me when I say there's nothing more exciting than getting that first debt completely paid off.

I cover the reasons behind working from your smallest debt to your largest in several lessons of the Debt R.E.D.U.C.T.I.O.N. System - lessons #2, #3 and #13. I believe it's that important.

Okay, let's move on to the "I" in our system…

I - INVITE challenges

By this point, you might be thinking "William, this sounds great but I don't think it's going to be that easy."

Listen, I understand completely. Changing the way you do things, and learning to give up some things you enjoy isn't as easy to do as it is to say.

That's why step seven in the Debt R.E.D.U.C.T.I.O.N. System is to "Invite" challenges. Challenges are going to come up whether you like it or not, so I believe you need to prepare yourself for them by expecting them and even inviting them.

You see, since those challenges are bound to come up anyway, you might as well get them over and done with sooner rather than later.

Every challenge you overcome is like another notch on your belt - you're that much closer to being debt free.

And part of inviting challenges is to overcome things that could come up unexpectedly.

Let's continue on to the "O" in our system to see how to deal with these things…

O - OVERCOME obstacles

Inviting challenges is one thing, but the really critical part is taking those challenges and overcoming them.

Let me give you an example…

Let's say you're several months into your debt reduction plan, and things are going well. You've managed to pay off two of your smaller debts and you're well on the way to having the third (larger) one paid off.

You're feeling great about your progress, and you can see the light at the end of the tunnel. Suddenly, your car breaks down and you're faced with a $250 repair bill that you didn't anticipate.

If you haven't prepared for something unexpected to come up, it could really throw you off your plan.

But if you're anticipating something unexpected to happen, you'll just roll with it - you make adjustments for that month and move on. Or maybe you already have an emergency fund set up (I discuss emergency funds in detail in lesson #7 of the full Debt R.E.D.U.C.T.I.O.N. System) and can easily cover the repair cost without a hitch in your debt reduction plans.

The important thing to remember is that you're not going to be able to predict and plan for every possible challenge.

The key is that you understand that there will be challenges and, most importantly, you can overcome them without getting completely off track with your debt reduction plans.

And that takes us to the final part of our system - the letter "N"…

N - NEVER get into debt again

Getting your debt paid off is a great feeling, but some people reach that goal and then they slip back into their old habits and wind up back where they started (remember the story I told you earlier about that friend of mine who paid off her debt and then racked it right back up?)

Part of my system is making a conscious decision to never allow yourself to get back into debt.

Overspending can be an addiction for some people, just like alcohol and drugs. Those people may need to consciously decide not to buy things on credit, even years after they have stopped doing it and got their debt paid off.

For other people, their new spending habits can become second nature fairly quickly and they may not even have to think about it once they've paid off their debt.

You'll know whether you fit into one of those categories or the other (or somewhere in between) soon after starting your debt reduction plan. (You probably already have a pretty good idea, in fact.)

But wherever you fit, you need to decide that you're not going to buy things on credit or allow your debt to pile up again once you get it paid off.

That might mean you have to cut up most of your credit cards so you can't use them anymore. You might even consider canceling them completely, although that isn't always the best idea - it can have a negative effect on your credit score in some cases (lesson #5 in the Debt R.E.D.U.C.T.I.O.N. System explains in detail how your credit score is affected by credit cards and other debt).

That also doesn't mean you never want to have any debt in the future. Debt can even be a good thing in some cases, as long as you control it and not the other way around. And there are some things that you often have no choice but to go into debt for - a mortgage on a new house is probably the most common example.

The key point you need to remember is this…

If you have debt, it needs to be debt that you can control
and that you have taken on with a full understanding
of how you will manage it and how you will pay it off.

And remember - credit card debt almost never fits into that description.

So there you go - I've just handed you the exact system I used to get myself out of debt. I call it the Debt R.E.D.U.C.T.I.O.N. System.

The Results Are Worth Getting Excited About!

I've seen some phenomenal results from using the "system". It got me from over $100,000 in debt to completely debt free, and it has worked for many other people as well.

Like I said at the beginning of this Q & A session, this same system is used by many people, I've just put it together in my own proprietary way.

If you'd like to find out more about the full Debt R.E.D.U.C.T.I.O.N. system, including all 26 lessons, the checklists, the mindmaps, the worksheets and much more, visit the Debt Reduction Academy main page.

Or if you'd like to get hold of your own copy of my 5 day mini course "Operation Money-Find: How To Find Money To Start Paying Off Your Debt This Month" just enter your name and email address into the space below.

* Every effort has been made to accurately represent this course and its potential. Please remember that each individual's success depends on his or her background, dedication, desire and motivation. As with any financial endeavor, there is no certain guarantee that you will experience the same results as others have.