Cutting debt and saving money at the same time may sound hard but it really isn’t.  It’s going to take action and a different mindset to do such a thing.  Sure, if you have the money to save, shouldn’t you put that money toward debt?  While most people say no, there are reasons should have a safety net as well.

Build your emergency fund – I don’t care how much you’re in debt.  If you don’t have an emergency fund, you’re asking for more trouble.  What happens if you lose your job?  your cash flow?  You need to have a bank account set up right now with at least 6 months of expenses set aside.  If you spend $2000 a month in bills, mortgages, etc.  You better have at least $12,000 saved up before you fight off your debt.

Start looking at your expenses- When the next month starts, I want you to write down every single dollar you spend.  I don’t care if its a quarter on a gum ball or $100 on a new pair of shoes.  I want you to carry around a little notepad and make it a habit to write down every dollar you spent for the month.  At the end of the month, we are going to dissect it.

Look at your notebook – When you finally write down the 30 days worth of spending down on a piece of paper, I want you to go through it and see what you can live without.  Did you spend too much on cable?  shoes at the mall?  Find out what you don’t need to buy for the months to come and cut it out 100%.  This is going to save you money and help you pay off your debt.  Now, in the future you’ll be able to get these services back once you pay off your debts but in the meantime, let’s cut them out for now.

Try to use cash or a prepaid credit card – If you have credit cards in your wallet right now, try and avoid them.  You’re going to want to use either a no fee prepaid card or a debit card.  This way, you’ll be able to control all of your spending.  Credit cards usually can do more harm than good if you don’t know how to use them.

Use coupons and other saving methods- This is a fairly simple process.  Every time you want to buy something, try and use a coupon or buy it on sale.  If you can get into the habit of not paying full price, you’ll be able to save a lot of money per month.   Also make sure that you check out items on the Internet because you may find that you can save up to 50% by buying online and not in a typical brick and mortar based store.

Cutting your debt isn’t hard.  It’s going to take discipline and action on your part.  If you’re not serious about it, you’re never going to get anywhere.  Just think of how great it’s going to be to be debt free.  Use that as your motivation and hopefully in no time, you’ll have a positive net worth and not a negative one.