Eliminating credit card debt is a top priority for many African-American families. The good news is that there are a few straightforward solutions to this problem.

The other good news is that is each step is simple to do, and completing each step successfully will arm you with the financial confidence needed to execute successful money management techniques.  Here are five solid tips to help you eliminate credit card debt. 



1. Locate all of your bills. While this step may seem like a no-brainer, one of the reasons that our bills go unpaid is simply because we forget about them. To get a quick, small win, appoint a shoebox or folder to store your weekly snail mail bills. Keep your ad hoc filing system close to where you drop your mail when you get home. If you receive billing statements online, create a virtual folder to store your bills. Within that folder, create sub-folders for categories like insurance, phone, or rent. This system is temporary, and should be replaced with something more comprehensive like an Excel spreadsheet, Quick Books, or Quicken Books.

2. Schedule a time to pay your bills. Designate a specific date and time to pay your bills and honor that commitment weekly. Use your phone to schedule financial reminders. If you need to, consult a financially literate friend to send a "pep-text" to get you pumped about doing right by your wallet.

3. Get Your Stats. Once you know what debt you have and are committed to getting rid of it, you need to have a financial plan of attack. On a sheet of paper, a spreadsheet, or a downloadable expenses template, write down all of the debt that you have. This includes but is not limited to credit cards, student loans, auto loans, charge cards, and personal loans. Place your outstanding debt in order from "least" to "greatest" in terms of their balance. Tabulate your total. When I was getting out of debt, I was looking for ways to feel victorious by achieving small wins. Instead of paying off debt that had a higher balance and/or higher interest rates, I set my sights on the "low-hanging fruit," which was debt with smaller balances. I really did not care about the interest rates; I just wanted to see progress. This approach results in a stronger feeling of accomplishment because you will be able to get rid of one source of debt almost immediately.

4. Create a Budget. "Budget" is a financial word that makes many of us cringe. But it can be your saving grace when you are focused on being financially free. To create a simple budget, use the "50:30:20 rule" of thumb. Fifty-percent of your budget goes for "needs" like food, housing, insurance, and transportation. Thirty-percent goes towards your "wants" like clothing, services, and entertainment and the last twenty-percent goes for savings. Except for when you're in debt-elimination mode. Then, a portion of that thirty-percent for “wants” goes towards eliminating debt. (Remember: You want to be debt-free and you want peace of mind). While it is up to you to decide how much of that thirty-percent will go towards eliminating debt, make sure you are using enough to make visible dents in your debt, but not so much to make you feel deprived and discouraged about moving forward with your plan of attack.

5. Automate Payments: If you have difficulty paying your debt on time and consistently, it is wise to set up monthly recurring payments. This is especially true for bills that you hate to pay. For whatever reason, I hate paying my cell phone bill and made sure that I automated this payment to avoid interruptions in service. This practice takes some pressure off of you because payments are automatically withdrawn from either your checking or savings accounts. With automation, though, it is important for you to regularly check and review your accounts to make sure payment amounts and dates are accurate. 

The key to becoming debt free is to focus on a series of small wins. Small wins create big change.

Good luck with your journey. With structure and commitment, I know that you can do it.

Connect with Kara on Twitter @frugalfeminista. Learn more about "The Frugal Feminista" at http://www.thefrugalfeminista.com. Download her free ebook The 5-Day Financial Reset Plan: Eliminate Debt, Know Your Worth, and Heal Your Relationship with Money in Just 5 Days.



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