If you’re in debt, you’re not alone. Most Americans have some type of debt, which is now estimated at around 13.7 trillion dollars in total. There are many downsides to it, like being more emotionally unstable and nervous, stress, and even relationship problems. Did you know that money is one of the biggest reasons why couples file for divorce?

Having debt is also very expensive compared to being financially healthy since you will have to pay interest on the money you owe. 

It also keeps you further from that any goal you have, such as owning your own home or traveling overseas.

Decreasing debt is one of the most common new year’s resolutions that people make, and it’s very possible to achieve. And it doesn’t matter how much you owe, as long as you’re focused and disciplined. 

Here are six easy steps to decrease your debt in 2020:

Stop Overspending

The first step is to change your spending habits and avoid making even more debt. Do you feel like a lack of control and end up overspending your money? 

There are many great tactics you can try is to incorporate into your financial life. 

One of them is Dave Ramsay’s envelope system. The idea behind this method is defining a budget and having an envelope to each category like groceries, utilities, leisure, gas, etc. Then you can only spend what you’ve put in each envelope. Its main goal is to give people discipline and control.

The second method you can use is the classic 50/30/20 budgeting rule. It says that 50% of your budget should go to needs like rent, food, and utilities; 30% to wants like entertainment; 20% to savings and loan repayment.

Be Aware Of How Much You Owe

You’d be surprised to find out that most people don’t actually know how much their debt is. If that’s also your case, you should check your bank account, credit cards, and credit report and put everything down on paper. List absolutely everything. It would be best if you had every penny accounted for. You can also use some apps like Mint that keep track of your money.

Cut Expenses

Now that you know what your expenses are and how you’re spending your money, start cutting costs and making replacements. Is there anything cheaper or for free? Do you need to have five different subscriptions to the same type of service? Are you going to the gym you’re paying monthly? Find new hobbies that won’t make you spend more money, start cooking more at home.

Consider Consolidating Your Debt

Debt consolidation is, in simple words, replacing significant high-interest debt into just one. It is usually a lot cheaper than the initial amount you owed, and it helps you stay on track. Depending on the type of debt you have and how good your credit score is, it might be a good option for you.

Have an Emergency Fund

Having a safe investment, preferably on a high-yield bank account, with six months of expenses saved up, is crucial in order not to get into more debt. This fund is aimed at a car or home repairs, unemployment, or any other expense that you weren’t expecting. 

Most people think that they should wait to start saving for an emergency fund after they paid their debt, but you should start it as soon as possible.

Make More Money

Making extra money will certainly help you decrease your debt faster, and possibly start investing and grow your wealth.

You can start making extra cash by selling used clothes online on social media like Instagram, or in a thrift store in your city.

There are many side-hustles you can also try on the Internet, such as being a pet sitter, or renting a room at Airbnb, or even freelancing as a writer, photographer, or designer.