Whether you’re a fan of Oprah or you’re not, a while back she had a technique on how you could get rid of your debt and tips that you could use in order to cut back down on your expenses.  After reading about this and checking it out, it seems like a great program and I just wanted to highlight exactly how it works.

The Short-Term Starts…

The short term is obviously for the next month or two.  This is when you’re going to asses your budget and track where your money is going. 

Look at how much debt you have:  Gather up all of your bills and add up how much debt you truly have.  Everything from your mortgage to credit card bills.

Track your spending for the month:  The most important thing that you can do is tracking your spending.  Every time you make a purchase for the month or spend your money, mark it down, even if it’s a dollar!

Cut down your credit card interest:  We’ve talked about this before but make sure you know how to cut down on your credit card interest.  Call up the companies and negotiate a new rate.  Most of the time this does work.  Always make sure you pay on time.

Pay only your bills:  When you’re in debt, you have no time to buy TVs and gadgets.  Instead, put as much money as you can toward your debt.

The long term follows…

Spend wisely:  In order to avoid debt again, you have to create a budget and stick with it.  If you don’t know where your money is going, you’re going to be in trouble.

Make money:  If you’re making money right now, that’s great.  If you’re not, get second jobs, sell stuff on Ebay and do whatever you need to do in order to get money.

Know what to pay first:  Always pay off your highest interest rate balances off first followed by the next and so on.  Always remember that you have to pay the minimums at least on everything else.

This is just one technique out there that was presented by Oprah.  Many have come back with feedback on how it worked.  Get more information on how the debt diet plan truly works at Oprah.com.