The average Canadian household carries a total debt of more than $95,000 . This is both mind-boggling and completely unnecessary! To end a life of debt, you need to:

Determine the amount of debt you have.
Start by making a list of your debts. Whom and how much do you owe? Include everyone from the mortgage and/or car lender to credit card companies and friends and/or family. Write out the amount of each loan, the minimum monthly payment, and the interest rate. Add these together to get your number.
Track your spending.
Track what you spend for at least one month to see where all of your money goes. It’s not just for big purchases; it’ll show you how the little things add up (coffee, candy, print periodicals). Track every last dollar. You can even create graphs to visually illustrate your spending, if that helps. You may be surprised what you find.
Choose which purchases to eliminate.
Okay, eliminate can be a strong word. Just try cutting back for starters. Cut back on the expensive coffee shop beverages so that you’re down to purchasing those once/week, once every two weeks; whatever it would mean for you to be cutting back substantially. If you’re a 5 day per week coffee purchaser, you’re probably spending more than $10 per week on coffee. Doesn’t seem like much, but when you add it up, you’re pouring $40 per month down your throat when you don’t have to! Instead, cut the coffee habit in half and put the saved money toward debt payments. Another popular waste of money: lunch out every day of the work week. Brown bag it several days per week and you’ll likely have an even heftier chunk of change to put toward debt payments than your repurposed “coffee money.”
Ask for a lower credit card interest rate.
All it takes is a quick call to your credit card company and you could be saving money immediately. Just tell your representative that you have offers for lower rates from other card companies and them to lower your rate. Usually, this works, but if they say “no,” ask for the manager. If the manager also says “no,” say you’ll be closing your account in the next few days and switching to a competing company with lower rates. At this point, they’re very likely to lower your rate. Try you bank too, most are more then willing to offer the best lowest rate.
Determine which debt to pay off first.
It’s usually as simple as: pay off the lender with the highest interest rate first. For example, if you have a bank loan at 10%, a credit card debt at 18%, and a car loan at 7%, pay down the credit card first, the bank loan second, and the car loan last. This means that you should focus on paying extra toward the principal balance in this order. Never skip monthly payments, even if all you can pay (or want to pay if the interest rate is the lowest out of all your debts) is the minimum.
If you’re lucky enough to be borrowing your money from friends and/or family and no interest is involved, you should probably pay off the smallest debt first to just get rid of it (first, ask your lender if this is okay with them).
Make more money (if possible) and/or cut-back on expenditures.
If you have debt, you need to pay it off as soon as possible. To do so, you need money that can be allocated for this purpose. Unless you start earning more money all of a sudden (promotion at work; pick up a second job) to help you make bigger payments towards your debt, you should definitely cut down on spending. In fact, cut down on spending even if you do start earning more money.

So, determine which expenses you can cut each month. Take your dining-out budget: cut it from $100 to $50 per month. Postpone new clothing purchases for a month or two; eliminate dry cleaning from your life; stop buying pop and just drink water—for free! Stop buying books and get them from the library. After seeing where you can cut back, consider making some extra money. This doesn’t necessarily mean taking on another job. Here are several suggestions:

- sell stuff online that you know you don’t (and won’t) use (ebay, Craigslist, etc.) - have a yard sale for that stuff you don’t and won’t use
- baby- and/or pet-sit
- clean houses here and there for a while
- pick up a part-time job (hint: maybe not at a retailer where you know you’ll be tempted to spend money)
- work over-time

When you’re debt-free, you’re free. And freedom is priceless! Living in debt is a common way of life, but it doesn’t have to be, and you’ll feel immensely better if you’re not. Just mix a bit of self-discipline with a dollop of hard work, and you’ll be out of debt before you know it.