Of all the 2009 New Year’s resolutions that were made a few weeks ago, many are likely to be forgotten in the upcoming months.

But if you made a New Year’s resolution to reduce debt in 2009 there are simple steps you can take to stay on track and reach your goal.

How to Reduce Debt in 2009

In order to be successful with your New Year’s resolution, you’ll need to clearly understand your financial circumstances.

Start by adding up your debts, establishing a budget and creating a timeline to paying off your debts.

Your plan may include eliminating extras and cutting out unnecessary spending. For some people, getting a second job could help save more money to chop down those bills.

Control Spending Habits

Millions of Americans rack up enormous amounts of debt by using credit cards to make purchases.

Credit was once so easy to get that many people felt as if they weren’t actually spending real money when they used plastic. As many of us can attest to, credit card debt can add up quickly.

Use credit cards only for emergencies and make it a habit to pay for purchases with cash. This will prevent overspending, reduce impulse buying and make you more aware of your spending habits.

Obvious Tip, But Necessary: Save Money!

In order to reduce debt, it’s important that you actively seek out ways to save money and eliminate cash leaks in your budget.

Even small savings in your budget can add up quickly. The money saved can be used to pay off your bills.

• If you have both a landline and a cell phone, you might consider discontinuing the landline.
• Pay credit card bills on time each month to avoid late fees and higher interest rates. It’s important to keep a close eye on bank statements, because many banks are raising interest rates without notice, even if you’ve never been late with a payment. It may be possible to transfer balances to lower interest accounts in order to save money.
• Shop wisely and seek out the best deals on essential items.
• Trim high grocery bills by buying generic products when possible and clipping coupons. If you’re able to shop at a supermarket that doubles coupons, the savings really add up.

[TIP: For more ideas on how save money, check out The Debtress blog.]

Too Deep in Debt? Chapter 7 Bankruptcy Eliminates Debt

If you've lost your job or are otherwise unable to pay your bills, you might consider Chapter 7 bankruptcy to eliminate debt.

By filing Chapter 7 bankruptcy, you may have unsecured debts like credit card, utility and medical bills discharged. This discharge can be a tremendous relief and may help you get a fresh start.

Tags: chapter 7 bankruptcy, debt