Debt is so easy to get into and so very difficult to get out of. Prevention is always better than cure but the reality is that we get enticed into debt over time and soon find ourselves in it way too deep. The cost of debt climbs quickly and robs us of the potential to create wealth.

Institutions make their money by lending money to you at a rate over time.
You can benefit by reversing the formula.
Interest + time = profit
You cannot reduce the interest rate but can reduce the time = less profit for the institution
Less interest for an institution means more savings for you
More savings for you compounded over time = more wealth for you

Here are 3 steps to getting ahead of your debt in 2014.

A debt trap can be likened to trying to fill up a bath with the tap on but leaving the plug out.

Step one                                                                                                        

Put the plugin by making a conscious decision to get out of debt. The culprits need to be identified and cannot be allowed to increase anymore.

Credit cards, overdrafts, personal loans, store accounts, and outstanding taxes. All have to stop.

Step two
Open up the tap with your disposable income. This is the money that is left over after your cost of living during the month.
Focus on living expenses. Split your expenses into ‘nice to haves’ and ‘must haves’. This is hard work. Being honest with yourself in identifying what you need and what you can do without.
Credit cards, overdrafts, personal loans, bonds, taxes owing

Step three
Keep a close eye on the water level. Divert the newfound savings back into the debt instruments. Targeting the highest interest bearing one first and then working through the next. Patiently keep your living expenses well under control. A new year brings on a wave of price hikes forcing you to squeeze those living expenses even more.