1. Stop incurring new debt. If you are truly committed to reducing debt, stop incurring additional debt. Only use credit cards if you can pay the balance in full every month. Instead, use a debit card, which automatically deducts charges from your bank account. If you don’t have cash for a purchase, wait until you can save the money.

2. Investigate consolidating debts with a lower interest rate option. You may be able to transfer credit card and other debt balances to lower interest rate alternatives. However, don’t use this strategy until you have step 1 under control. You don’t want to obtain a lower interest rate card and then just start adding new balances to it.

You may also want to consider using a home-equity loan to pay off your consumer debts. Home-equity loans typically carry lower interest rates than other forms of personal loans, and as long as the balance does not exceed $100,000, interest paid on home-equity loans is deductible on your tax return as an itemized deduction. Keep in mind that you are taking equity out of your home. This may be a good tradeoff if you use the funds to reduce higher cost debt. However, if you just run those balances up again, you still have the consumer debt plus less equity in your home. To compare Home Equity Rates from both state specific and national lenders go to the ManagingMoney.com Mortgage Center.

3. Prioritize and pay down your debts. List all your debts and monthly payments, listing the debts from highest to lowest interest rates. Add up your minimum payments and then determine how much more you can budget to pay down those debts. Rather than paying a little bit extra on all your debts or adding extra to your mortgage payment, use these additional funds to pay off the debt with the highest nondeductible interest rate. Once that debt is paid in full, start paying the debt with the next highest interest rate, continuing until all your debt is paid in full.