Step 11 of 12 Toward a Debt-Free Life: You're Almost There!

Earlier this year, we brought you the first ten of twelve steps toward living a debt-free life.

Whether you're taking on a massive project at work or at home, or you're just trying to get out of debt, big things can feel overwhelming sometimes.

When you are faced with a big task, there's one thing experts agree on: It really does help if you break down that task into its smaller components. A big project doesn't seem to awful if you write down the five small, easy steps to complete it.

In addition, doing this will make the project feel a bit more manageable. The progress you make with each small step can help keep you motivated and make the entire project seem a bit less daunting and stressful.

That's why this series, on living a debt-free life, was broken up into twelve manageable tasks throughout the year. This 11th step in the process is a pretty easy one, and it's sure to give you a sense of satisfaction and keep you motivated through the winter months.

The 11th step is to go back into the original spreadsheet you created from Step 1, and make sure that you have updated ALL of your progress! Watching those numbers shrink will give you even more motivation to work harder and make it all happen faster. Just imagine; one day, you won’t owe anyone a single dollar!

Here's a review of what we've talked about:

• Step 1: Take stock of your debt by writing down exactly how much you owe to whom, plus information on payment amounts and interest rates. Put that information into a spreadsheet.

• Step 2: Assess your spending, and work hard on not incurring any more debt than you already have.

• Step 3: Call your credit card and loan companies and ask if you can have your interest rates lowered!

• Step 4: Create an emergency fund so that unexpected expenses like car repairs or medical bills don't completely derail your finances.

• Step 5: Organize your finances by really keeping track of every expense during the course of the month — from that morning latte to utility bills. It’s critical that you know where your money is going so you can get more control over it.

• Step 6: Trim your expenses by taking a look at the money you spend and figure out what you can cut — from subscriptions to take-out dinners. Put that money toward paying down your debt, instead.

• Step 7: Start paying down more debt using the "snowball" method.

• Step 8: Find ways to make more money — and throw it at your debt, too!

• Step 9: When you get an unexpected windfall, consider your options carefully about saving that money or putting it toward debt before you do anything else with it.

• Step 10: Put your savings on auto-pilot by setting up automatic transfers from your paycheck to your savings account, retirement fund and vacation fund.

There's one other thing you can do this month to keep your progress moving forward: Make sure you have a reasonable holiday budget and stick to it! The holidays and the excitement of sales and gift giving are a very common way to add to your debt, so sticking to a manageable budget will help keep you out of debt.

Stay tuned for next month's tip on living a debt-free life!