By Lucy Lazarony, Credit.com
Getting debt-free in your 20s can be more than just a dream. It can become your reality if you are willing to work hard, pay your debt obligations as agreed and spend less than you make.
With planning and willpower, following these guidelines can help see you through to your goal.
1. Know Your Budget
Before you can make a plan for paying down debt, get a handle on your monthly budget. How much are you making each month? What are your current monthly expenses? How much are you paying toward your debt obligations each month?
Are there quick ways you can slash your spending? Visit the public library for free Internet access and free books and movies. Stay in and cook more and eat out less. Make your coffee at home.
Apply the money you save to paying down debt.
2. Zero In on Your Debt
Make paying down your debt a financial priority. Many 20-somethings are dealing with the weight of student loans in the tens of thousands of dollars. Add up the total amount of your debt and take a good look at the number. Now develop a plan for paying down your debt.
Try out different repayment plans using a debt payoff calculator. Choose the monthly payment amount that makes the most sense for you and your budget. When your income increases, revisit your plan. The quicker you pay off your debt, the more money you'll have to apply to other financial goals. And there's plenty you want out of life, right?
3. Live Below Your Means
Pretend you make 10 percent or 25 percent less than you actually do. This one can be tough, but it's an effective way to turn around your financial life. If you spend all you make every month, you will never save money for future goals and you will stay in a cycle of borrowing and debt.
So spend less than you make and put the money you don't spend to good use.
Pay more toward the principal on your student loans or pay ahead on your car loan. Pay down high-interest credit card debt. And most importantly, build some savings for emergencies and future goals. Want a house one day? Want to travel? Start putting some money aside. Within a year or two or five you will be amazed at the money you will have saved.
You can also track how your pay-down efforts are affecting your credit. By monitoring your credit scores regularly, you can see how paying on time and reducing your overall debts can have a positive impact on your scores. You can monitor your credit scores for free through Credit.com, and you can also get a personalized plan to build your credit.
This post originally appeared on Credit.com.