Never living outside of your means and relying solely upon your income to live is a wonderful goal. However, sometimes you have to take out a loan – to pay for college, a car or your home. But if you take on more debt than you can manage, your credit score, relationships and sense of well-being will suffer.

If you are struggling with managing your debts, there are numerous tools to help you calculate repayments, and some simple lifestyle changes can help you reduce or eliminate your debt.

Debt reduction

Before thinking about how to reduce debt, look for ways to trim your monthly expenses. Examine your receipts to see where your money is going. If a pile of restaurant take-out receipts is sitting in your car, you can see one possible solution. Reducing how much you go out to eat can free up a significant amount of money to pay off your debts.

Similarly, look at your monthly entertainment expenditures. If you pay a high price for premium cable, ask yourself how necessary that expense is. Could you get by just as easily with your local channels, or a cheap subscription to Netflix?

After you’ve freed up some of your monthly income, you can start prioritizing which debts to pay.

Mortgage

Buying a home is one of the largest investments you can make. Most mortgages last 30 years and you can expect to pay a large amount of interest in that time. However, you could make a slightly larger payment each month, reducing the overall amount of interest you repay. Be sure to read your loan agreement first, as some mortgages have extra fees for early repayment.

Student loans

The cost of education has risen over 130 percent over the last 20 years, and many students have no choice but to finance their education with loans. While the interest rates for federal loans are reasonable, the interest on loans over time results in higher monthly payments, especially if you’ve opted to defer payments. Using some smart repayment techniques, such as auto-payments that reduce interest rates, can reduce the time spent repaying your loans. Remember: Student loan debt can’t be discharged through bankruptcy, so make paying off your loan a priority.

Credit cards

Easy access to credit can lead to uncontrolled spending and mountains of debt gathering interest at a high annual percentage rate. Don’t consolidate your debt or declare bankruptcy right away, though – using your repayment options in an intelligent manner can keep financial crises at bay.

• Set a goal: Set a realistic goal of when you would like to be debt-free. Having an endpoint in sight will keep you motivated and focused on getting out from under your credit card debt. Calculate what payments to make to meet your goal.
• Make payments: Don’t let the lure of minimum payments take over – if you allow interest to accrue, you’ll end up paying much more than the purchase price, for anything you charged. Instead, pay off a large percentage of one credit card balance each month while making minimum payments on the others to avoid other fees. Consider paying off your lowest amount first, then moving to the card with the highest interest rates.
• Control yourself: Keep your credit cards stored somewhere away from your wallet – ideally at home. Use them only when you have an emergency car repair, or other urgent need.

Managing your debts can be difficult, but smart repayment and planning ahead will make the process much easier. Examine your options, tweak your lifestyle and stick to your plans to become debt free.