Once we’ve realized that we’re in debt and decided to do something about it, the natural sequel is to decide what to do.

In future weeks, I’ll be talking about more specific strategies for getting out of debt. Today, we’ll just start with the most basic of basics.

No matter what form your exact path out of debt takes, it will be shaped by one of three strategies. As all sensible people know, there are only three and exactly three ways to get out of debt:

  1. Spend Less
  2. Earn More
  3. Both

The Big Leap: Changing Your Mental Money Outlook

It’s difficult to accept that we have to make big changes in our lives. Some people seem to be born with an integral ability to manage money successfully, but I am not one of those people. I was used to spending carelessly and thinking very little’”very, very little’”about the consequences. Those of us with this kind of money management frailty may have a difficult transition to a financially stable life.

So, our first job, dear readers, is to make a mental adjustment. When you come to the realization of the necessity of change, this is the foremost important task. Changing your outlook alone will not get the job done, but nothing else can follow until you do.

Some people will tell you this is not necessary There are lots of people out there peddling get-out-of-debt schemes, and get-rich-quick schemes. If you’re like me, these advertisements set off your BS detector instantly. The people making these promises are serving their own agenda, not yours’”never forget that.

The important thing to bear in mind is that the feelings of frustration and helplessness that characterize being deeply in debt can only be banished by positive action. Making big changes to your life is indisputably difficult, but the reward is a sense of satisfaction and relief from that sensation of being overwhelmed by your debt.

Method #1: Spend Less

Frugality is in vogue these days. Just check out the google trends for ‘œfrugality’. Look at all those spikes in 2008!

Frugality is about big things and small things. In my life, frugality has meant delaying big things like buying a car and moving to a better place, and changing a myriad of small habits. (Still working on it!) Once I started tracking my spending (a topic for another post), I found a lot of places to cut down on spending, most notably in my spending on food. I hadn’t realized I was dining out so much. That had to be cut down, which was very irritating.

Take a good look at your own spending to find where you can make cuts, bearing in mind that changes big and small may be necessary.

Method #2: Earn More

Some people find they have no turn for frugality, or they find that reducing their expenses is not enough to overcome their debts.

Here are a few common-sense ideas to get you started on your quest to increase your income:

One vital word of caution. Beware of lifestyle inflation. If you increase your income in order to fight debt, and then fall into the trap of spending more money proportionate to your new earnings, you will have actually made your situation worse. Be wary.

Method #3: Both

Curtailing your expenses while working hard to increase your earning can involve great penury and self-denial. If you find it necessary to take severe steps to reduce your debt, I won’t attempt to dissuade you. But I will remind you that moderation in all things is a good idea, and that starting a plan so extreme that you can’t maintain it is a recipe for failure.

Have you ever had to make a big lifestyle change to manage your money? I’m still getting used to mine. Tell me about yours!

Photo credit: stock.xchng.