2. Take responsibility for your finances. Your finances are your responsibility, not your significant other’s or your parents’ (or your adult children’s) or a financial advisor’s. For couples, it’s common for one person to handle the finances while the other plays dumb. Just because one person seems to have a better knack for finances, doesn’t mean the other person is off the hook. The person handling the finances could be just as clueless as you and could be digging you both deeper into debt. You won’t know if they are really paying the bills or taking out cash advances for a shopping spree. You won’t know unless you take control of your own finances.

3. Differentiate between a “need” vs. a “want“. Do you really need a fancy car, designer clothes, or the latest tech gadget? To get to this point, you’ll have to do some soul searching. If you are secure with who you are, then you won’t need “things” to make yourself feel better. Consumer debt is usually tied to underlying insecurities.

4. Create a realistic budget that includes a debt repayment plan. Track your expenses for necessities for a few months. Make sure you spend less than you make. If your budget still exceeds your income, either find creative ways to save money or earn more money. Be sure to include debt repayment in your budget.

5. Pay more than the minimum amount due. If you are only paying the minimum amount due, you are only paying the interest for your debt and none of the principal or amount you owe. It’s like running in a hamster wheel and getting nowhere. Pay off your debt as fast as you can, and you’ll start to see the light at the end of the tunnel.

Check out Money Hacks Carnival #102 now.

Open new credit cards. Getting a free T-shirt, umbrella, or a one time discount is a great perk for filling out a form! Aren’t they generous? Who cares if the free gift has the company logo on it? You enjoy being a walking advertisement for their product. Who cares if every credit card account that you open goes onto your credit report. Who cares if having a brand new credit card lowers your FICO score?

Don’t read the fine print. You don’t like to read long credit card or loan agreements. You only want to sign on the dotted line. You trust the loan officer or customer service person when they tell you that you are getting a good deal, even though they are being paid to say that. You only care that your minimum payment or interest is lower even if it’s only temporary.

Let your bills pile up. Don’t look at your bills. If you don’t know what you owe, they don’t exist, right?

Be clueless about the exact amount you owe and the interest rate of each debt. You make an educated guess and think you owe $5,000. But in reality, it’s really $8,000. You were off by $3,000. Oops! You could come up with a better strategy to pay off debt if you knew the principal amount and interest rate of each debt. But you don’t want to know because you don’t really want to admit that you are in debt. You like lying to yourself.

Keep using credit cards that carry a balance. Can’t pay off your credit cards every month? Keep using them because you’ll be slapped with finance charges every time you make a new purchase. Credit card companies will love you since they make so much money off of you.

Take out a loan. Want to get deeper into debt? Take out a high interest loan online. Why not trust Gary Coleman or Montel Williams to sell you the best loan in a radio or TV commercial? After all, you can trust them, can’t you? They have your best interest at heart since they are being paid a lot money to tell you that this is the best loan and it will solve all of your problems. The interest rates are through the roof right right now since a lot of people are borrowing money. You’ll pay off credit cards with this loan but incur a higher interest rate than all of your credit cards combined! You like being ripped off.

Don’t set a budget or cut expenses. Budgets are boring and restrictive. You’re a free spirit. You want to buy things as you please, even if you don’t need them. Who wants to know that they could get a better deal on their cell phone, cable/internet, or car insurance? You like wasting money.

Don’t have a debt repayment plan. You’re too lazy to create a debt repayment plan. You enjoy being in debt. Everything will work out eventually on its own, won’t it?

Pay only the minimum balance. You don’t want to give the credit cards any more of your money. That’s why you only pay the minimum balance. You’ll pay for your credit cards for a long time after you’ve made the purchases. But it’s okay because you’re only paying $50 a month.

Redeem credit card offers. Credit card companies love you! They keep sending you special offers to open more credit cards, since you have been such a great customer. Credit card companies tell you that you are a valued customer even though you haven’t paid anything off. They want you to have more money to spend. How thoughtful of them!

Don’t learn about personal finance. You don’t care to learn anything about how to manage your money or debt. It’s too hard to understand. But you’ve already broken this rule by reading this blog!

Rely on others to give you advice about your money. You don’t know much about how to invest your money. That’s why you hire a financial advisor to help you invest your money. Even though celebrities have lost a lot of money by trusting someone to invest their money, it’s ok. You would rather trust someone else to handle your money than trust yourself.

Give up. You figure that you’ll never pay off your debt. You are too depressed and overwhelmed. You think you are the only one who has ever been in debt. If you read personal finance blogs, you’ll know that almost every personal finance blogger has been in debt and have dug themselves out of it. Dave Ramsey is a great example. He had it all – a $250,000/yr salary, a nice sportscar, wife, and a house. When the real estate market changed, he owed $1.2 million. During that tough time, he lost everything except for his house. He had to sell his nice sportscar that he thought he deserved. His marriage was strained.

Know that you are not alone and you will get out of debt one day. Change your attitude and you will change your situation.

Included in Money Hacks Carnival #102.

Recently, my husband and I paid off a huge debt ,even though we are living on only one income. I’m still in shock that we paid this off so soon and without borrowing money. We did it and that means you can do it too!

When I got married 2 years ago, a friend asked me if we could live on one income, if we had to. This scenario would ring true if we started a family and one of us stayed home to raise the kids. Back then, I didn’t think it was possible.  We both had full time jobs but maybe we weren’t managing our money well. Or maybe all of our money went to our wedding, which was paid in full.

I lost my job last September. For a few months, we were forced to live on one income. Surprisingly, I was excited by this challenge. See how we downsized our budget and saved over $100 a month. It took 3 months for me to receive unemployment. Just as soon as unemployment checks started coming in, it ended, since I didn’t qualify for the extension.

All of my unemployment checks came all at once, in batches. It was a windfall of money which I am thankful for.

We could either save the money so we wouldn’t have to live on such a tight budget or pay off one of our debts. I knew that if we had extra money, we would end up spending it on something else. So we chose the latter, to pay off one of our biggest debts. This debt had such a high interest that if we only paid the monthly minimum payment of $250, we would be paying for it until 2014!

Also, I sold some of equipment from my former wedding video business. I sold a prized possession, my very first video camera. It was sold the next day on Facebook, of all places. I had a difficult time letting this camera go since I had built up a strong emotional attachment to it. But I kept reminding myself of the wonderful feeling I would have, once this debt was paid off.

By taking advantage of unemployment money and the sale of video equipment, we were able to pay off this massive debt, which we are extremely happy to get rid of. It feels like an enormous weight has been lifted off of our shoulders!

What can you do to pay off your debts faster? Do you have high-priced items that could sell well? Can you lower your budget more?

1. Know how much you make per month. First and foremost, you need to know how much money is coming in each month, whether it’s from your job, your spouse’s job, unemployment insurance, etc. Track the exact amount after taxes.

2. Set up a monthly budget. Spending more than you make is easy without a budget. You need to know exactly where your money is going. Track expenses for a month. Then set up your budget accordingly. Make sure your monthly budget does not exceed your monthly income. Don’t forget to set aside money to pay off debt.

3. Cut unnecessary spending. Cooking at home can instantly cut costs. Eating out is expensive and can add up quickly. On average, a couple can easily spend $20 – $30 on eating out at a restaurant. By cooking meals at home, you can bring down the cost to about $2 – $3 per person. What other ways can you reduce spending?

4. Track your debt. If you don’t know the exact amount of your debt, the interest rates on your credit cards and loans, the minimum payment amount, or payment due dates, then you cannot begin to make a change. Put all of your credit card and loan info onto an Excel spreadsheet. If you are low tech, use a piece of paper. Keep track of every loan and credit card, the current balance, the interest rate, minimum payment, and the monthly due dates. Refer to this sheet every week to keep track of payment due dates.

5. Stop using your credit cards. If you can’t pay the full amount on your credit cards every month, stop using your credit cards! If you carry a running balance on your credit card, any additional purchases will be assessed a finance charge right away. In fact, you will be charged a finance charge the same day you make a purchase, every time! You will not receive a 20 day grace period for any purchases (like you do when you pay in full by the due date every month). You don’t need to incur anymore debt than you already owe. Try to use cash for purchases. Also, don’t use the cash advance checks that come with your statement. Interest on cash advances can be 20% and up. Don’t dig yourself into deeper debt. Dig yourself out!

6. Pay off debt in collections first. If you have bills from a collections agency, then pay this debt off first. Debt in collections will lower your credit/FICO score. A low FICO score lowers your chances of being able to rent an apartment, get a cell phone, and qualify for a mortgage loan with a good interest rate. As a result, having a low credit score affects everything in your life. The good news is that you can improve your score by paying off any debt in collections.

7. Pay off the credit card or loan with highest interest and balance. Gather all of your credit card info – current balance, minimum payment, and interest rate, per card. If you’re bad at math, don’t worry, here is a wonderful free tool that will calculate how long it will take to pay off your debt. You can enter multiple credit cards and loans. Enter your balance, interest rate, and minimum payment. For the interest rate, for example, if it is 22.9% enter “22.9″. It will automatically give you a debt payment plan without you having to use any brain power. Click here for CNN Money’s debt calculator.

This is only a visual example. Click on the link above to use the debt calculator.

Enter the amount you can afford to pay towards your debt each month or your debt free deadline, in years and months, and it will figure out how much you need to pay every month to reach your goal. The debt calculator will apply more money to the credit card or loan with the highest interest and recommend that you pay the minimum payment on the remaining cards.

Seeing the whole picture of how long it will take to pay off all of your debt is liberating in a way. It takes away the fear of the unknown. Soon you will be debt free and that’s a wonderful feeling. Plan some sort of celebration when you pay off your debt!