Which Way Is Your Debt Clock Turning?

News out yesterday that the famous “National Debt Clock” keeping a running total of our nation’s debt has run out of spaces (obviously this photo is a little dated). The Time Square centerpiece chose a heck of a time to run out of room, just as the Dow tumbled below 9.000 for the first time in five years.

Fortunately, unlike the government our debt clock is turning the other direction.  We’ve managed to eliminate about 25% of our total debt since March of this year, but we still have a way to go to be completely debt free.  It is too bad the government hasn’t figured out what we figured out a couple years ago–you cannot continue spending more than you bring in.  It is a simple concept to understand, but it takes tons of discipline to implement.

For the first few months of our financial turnaround we basically treaded water, keeping expenses about even with our income. It took a while to adjust downward from there, but we made it work by eliminating expenses and boosting part-time earnings. Both moves increased our disposable cash available to pay towards debt reduction.  As we paid off one small credit card, we took the amount we used to pay on it and rolled it into the next smallest card’s payment, and so on.  Pretty soon we were eliminating a small credit card or medical bill every month!  Of course, eventually we ran into the heavy hitters–my left over expenses from school.  But, even those balances have been significantly reduces, so I believe we are on the right track.

How about you?  Have you had any success reducing your debts recently?

Photo courtesy of Lotzman Katzman