By May “Mosaic” Advincula, Editor-in-chief

With the rush of the holiday season over, the lingering bills have started to creep up onto your wallet. You may have resolved to start the new year financially sound and to get out of debt.

Depending on how much debt you actually have, paying it all off in a year might not be realistic. But with a new outlook on your finances, you can begin to tackle those outstanding balances.

One of the initial things that you must keep in mind is that getting out of debt is a commitment and won’t happen overnight. It’s important to stay patient and to have a solid plan in place that will allow you to stay on track.

Evaluate your debt. You need to know where you stand financially before you can build an effective plan to tackle your debt. This can be as simple as taking out a pen and paper and listing all the types of accounts you have and how much you owe. This process might seem tedious at first, but it will give you better perspective on how you should approach your plan to decrease those existing debts.

Put your debt on a diet. Drawing the line between needs and wants is important if you want to stay on track financially. According to financial expert David Bach’s “latte factor” concept, “Putting aside as little as a few dollars a day for your future rather than spending it on little purchases such as lattes, bottled water, fast food, cigarettes, magazines and so on, can really make a difference between accumulating wealth and living paycheck to paycheck.” Saving money where you can eventually adds up. To see how much you’re spending, click here to try out the latte factor calculator.

Make a budget and stick to it. Once you’ve determined your needs, you can begin creating your budget and track your debts. Websites like and provide resources such as budget worksheet templates that you can use to help you get started. Or, you can simply use an excel spreadsheet to track your balances and your payments. The key to staying motivated is to visualize your progress.

Use debt stacking. Even though you’ve got your budget in place, your debt isn’t going to magically disappear. So, how can you effectively start paying off your debt? You can try a process called debt stacking.

According to, debt stacking is “a simple method of reducing debt in the shortest time possible with the money that is already going to payments.” The interest that builds over time is usually what gives consumers the most problems, so debt stacking can save you time and interest.

In order to utilize the debt stacking strategy effectively, you pay off the minimum amount required on all of your debt until the first one is paid off. Then, once one balance is paid off, you then apply the minimum payment of the first and add it to the payment of the next debt. To see an example of how this works, click here.

Depending on how much you owe, getting out of debt might seem overwhelming at first. However, with a proper plan in place and a little discipline, you can ease the strain off yourself and your wallet.


Debt Stacking:

Latte Factor: