Last week, we put our goals on paper to cement our commitment to them. This week, the rubber hits the road as I share some effective ways I approached eliminating my debt on the way to saving for a dream trip around the world.

Debt Management Tips
1. Value saving money over spending it
Have you ever been without debt? Maybe the last time you can remember was when you were a kid. Those were the days! Cultivating a low tolerance for debt may translate as dull and conservative; however, if you require money to reach your goals and dreams, the sooner you adopt this attitude, the better.
2. Buy a book about paying off debt, TODAY
A $12 book I bought about five years ago helped me organize my approach to paying off thousands of dollars in debt over the years. I went with the catchy Debt-Free by 30, Practical Advice for the Young, Broke, & Upwardly Mobile.
Just about any good debt book will provide a path for you to follow via answering self-assessments, accounting for monthly expenses, and harping on the evils of credit card companies. Flipping through the book, I cringe at having considered it acceptable to pay $140 monthly in credit card payments (most of it toward just the interest).
3. Apply the 90/10 rule with gift (or unexpected) money
A year after one of my grandmothers passed away at the age of 90, I received a monetary inheritance.
Well before it was wired to my bank, I had established a plan to use 70% to pay off the total balances on my three credit cards (canceling two of them in the process), 20% as seed money for my trip (which I locked up in a 12-month Certificate of Deposit), and 10% on "stuff."
When the money arrived, I executed my plan immediately. I have no clue as to what happened with that remaining 10%. It just seemed to evaporate (which is why I strictly limited the percentage of purposeless money).
4. Pay off high-interest loans first
I picked this tip up from a second book, The Four Laws of Debt Free Prosperity, which I received for free as part of a lunch series on financial planning offered by my employer. When I read it, my remaining credit card balance had reached around $2,000, and I was struggling to pay it down again.
Here's the Debt Elimination Exercise in an Excel document that I drew up while reading the book. Ultimately, I decided not to worry about paying down my car loan (see tip #8).
For readers carrying college-related debt, refinancing student loans can help reduce this monthly expense, thereby allowing you to focus on paying off higher-interest debts first.
5. Use online banking to set up automatic payments
Paydays can be intoxicating. You have a sudden influx of money into your bank account, which can cloud your judgment, tempting you to buy stuff rather than pay off your debts.
To ensure you continue to chip away at them and to avoid racking up late fees, schedule debt payments to coincide with your paydays. Many institutions allow you to schedule recurring payments to make it even easier to part with your money (don't worry; there's no better place for it to go).
6. Call on friends and family
If you owe money to family or friends, share your goals (or dreams) with them and suggest they forgive your debt instead of buying you a birthday or holiday gift. You include them in making your dream a reality, which is a powerful approach.
7. Avoid retail credit cards
Resist the temptation to sign up for a new retail store credit card for an instant discount on the items you're purchasing when offered. If you're like me, that instant $30 savings can lead to a $1,000 wardrobe financed on store credit (and high interest rates). Despite this lesson, I still buy at Banana Republic, only with cash rather than credit!
8. Insurance money
If you happen to crash your car (like I did in 2005), and you need another, buy it used and put ALL of the insurance payment toward the down payment. Do this regardless of how dealership finance or bank people suggest you invest it (thus taking on a higher debt through their organization and increasing their revenue from interest payments).
Thinking long term, it's better to begin eliminating your debt while you still can rather than leave it for your loved ones should you pass away unexpectedly. What have been your most effective strategies for tackling debt?


















It'd been several years since I saw my college friend Andrew (see Breathingplanet in my blogroll), and we had recently reconnected via MySpace. Since he was living in Brooklyn, I called him and we made plans to meet downtown. We ducked into Local 138, a random bar near the cross street we had picked. I ordered a couple of Strongbow ciders, my brother and Andrew beers, and we got into a variety of conversations as we caught up on the past few years.











Well it has also been fun hanging out down on the first floor of Bob's: $1 Heineken's is good with me (later I find out it is much cheaper to just buy them at the nearby supermarket). We ventured down to the Heineken Brewery this afternoon, but the tickets normally sell out by 11 AM so we decided to go tomorrow. We then went to the Vincent Van Gogh Museum. House of Arles, Sunflowers, and Wheatfield With Crows, among others were my favorites. We then went back to the hostel, where I went to the bathroom. I'm starting to adjust to my European diet, and I probably should start eating more to stay feeling well. Finally, Dave, Sam, and I went to the Magic Mushroom Gallery. They had lots of weird herbal drugs, like powder that you snort like cocaine. It was all legal though, and I guess there is a demand? We also went to one of the Sex Museums. It was a novel idea, I guess, but not too interesting.






I ended up hopping off the bus in the lower 










Dharamsala itself is not much of a city.
My hike to Triund ended up being one of my favorite trips in India.

I had two firsts last night - watching the Amazing Race and eating Peking duck.

