Need a debt reduction program? You have lots of company in this situation. Here are some tips on how to help yourself.

1 - Knock Off Using Credit

If you haven’t done this one, then this is where to start. Put the credit cards and line-of-credit checks under lock and key, and operate as if you don’t have them at all. Figure out how to make more income and pay only with cash. This is the one action that jump-starts your program to get out of debt. This step is critical to your program if you truly want to be debt free.

2 - Never Commit to Spending More Than Your Company’s Income

Using credit to purchase something commits your company’s future income to the credit card company. That is economic slavery. Take a hard look at whether the item you are about to buy is really something that will increase your company’s income, or whether it is just something you want at the moment. If you really need it to produce more income, figure out how to make the cash to pay for it over a short period of time, rather than buying on credit. Find ways to increase the company’s income and use it to pay both current expenses and pay off credit debt.

3 - Never Pay Just The Minimum Payment Amount Required

To be really effective, your program should include using 10% to 15% of the business’ weekly income to pay against the debt. Set a goal to pay at least 3 to 5 times the minimum required payment on each credit card and line of credit. Put aside a portion of the payment money each week until the statements arrive at your office. It’s much easier to set aside a smaller amount over 4 weeks than to try to come up with a big chunk in one week.

Paying more on the highest interest rate card is an effective debt reduction tool you should use in your program. An additional tactic is to pay off the lowest balance cards as quickly as you can. After paying those lower balance cards off, you free up more cash to use on the high interest rate cards.

4 - Never Spend Over The Card Limit Or Pay Late

Getting hit with $25 to $39 late payment or over-the-limit fees on which you’ll be charged interest is a sure-fire way to set your debt reduction program back one giant step. Plus, if your payment is more than 30 days late, that black mark stays on your credit record for 7 years - a harsh penalty to pay.

Recently the Vice President of a U.S. bank announced on the news that more than 24 Billion dollars was paid by consumers in interest, late fees and over-limit fees last year on credit cards. Don’t think the credit card company really minds if you pay late or go over your limit. They make billions when that happens.

5 - Find Ways To Cut Expenses

An effective program to reduce debt requires as much extra cash as possible and as fast as possible. Evaluate where your business’ income is going and reduce all unnecessary expenses that do not contribute to increasing the income. Before you spend, work out how much money that item is going to bring back in to your company.

TIP: Always keep promoting your products and services to everyone - this is one area you don’t want to stop spending on. Just make sure you are getting more money back in sales from your promotional activities than what it costs to promote.

Managing a company’s income correctly to make sure it survives takes more than a program to reduce debt, but this is a great place to begin. There are other tactics you can use to increase the company’s income, pay bills when they are due, have cash reserves for emergencies, increase profits and pay yourself a bigger paycheck. Who doesn’t want that, right?

Sandra Simmons, President of Money Management Solutions, has years of experience helping professionals and private individuals manage their income to become debt free. To find out about the Money Management Software she created, watch the FREE 5-minute demo video on her website at www.MoneyMgmtSolutions.com

- Sandra Simmons