It’s a new year, a clean slate. You’ve never been this motivated to get out of debt. You are so determined you’ve decided to double—maybe triple—your payments. Every dollar you can get your hands on will go straight to your credit-card debt. No one has ever gotten out of debt as fast as you’re going to do it.

Your enthusiasm is commendable, but you need to take a deep breath. Cool your jets. If you proceed with that kind of plan you will surely find yourself even deeper in debt this time next year.

There is a right way to get out of debt and your overzealous plan is not it.

Commit to reason. Anyone who’s lost weight and kept it off knows the secret is slow, consistent loss—not crash dieting. If you lose ten pounds in a week, for sure you will replace it with twenty. But lose a half pound a week, every week, and you’ll keep it off.  Same with paying down debt. You must do it methodically, according to a reasonable plan.

Get into balance. Spending all that you have from paycheck to paycheck is like trying to drive with a flat tire. Things are way out of balance. The way to create financial balance is to commit to three things: Giving, saving and living below your means. Here’s the ideal formula: 10-10-80.

Start giving. If this is a new concept to you, hang on. Hear me out. Giving away part of your income even when you are deeply in debt, is the antidote for greed—something we all deal with simply because we live in such an abundant society. The antidote for greed is also gratitude. The way you express your gratitude is through giving. Giving away 10 percent of all that flows into your life is the goal. But if you can’t start with that, start with something.

Create a safety net. Think about it. If you send every available dollar (nickel, dime) to your credit-card company so you have zip in the bank, how will you manage to fix the refrigerator or pay for the new brakes? Stuff happens and if you are not prepared, you’ll have no choice but to run to your credit cards for a bail out. When that happens you will be discouraged and probably end up even deeper in debt.

The way you create your safety net is by saving 10 percent of your net income. Make that just as important as paying the rent or mortgage payment. Yes, even though you are deeply in debt, even though you owe everyone under the sun, you must start saving. By creating this safety net you will be able to keep going when stuff happens without falling backward into debt.

Keep track. Good managers know where the money goes. And the only way to know is to track your spending.  Find a system that works for you and then use it. If you need a suggestion, take a look at Mvelopes.com. This is a  user-friendly system that makes balancing and managing your checking account a breeze. Almost fun.

Embrace frugality. Living on less than you earn is my definition of frugality. Living on 80 percent of your income may be a jolt to your system if you’ve been living on something closer to 120 percent. And that’s what debt-proof living is all about.

We give, save and live frugally to make sure we can fund our lifestyles on the money we earn so we are not creating debt. Get it? Debt-proof!

Decide right now that you will seek every possible way to stop spending so much money. Look for tips, tricks, hints and ideas for how to stretch your dollars. Employ everything you know already—like eating out less often. A lot less often. Challenge yourself to grocery shop less often, to make everything you buy last longer. Make your own stuff whenever you can—even your laundry detergent (no kidding).

Getting out of debt is can be challenging work. But it’s a lot easier if you do it in a reasonable way that is also effective. And permanent.

So are you ready? Let’s go!

© 2007 Debt-Proof Living. All rights reserved. Used with permission.

 "Debt-Proof Living" was founded in 1992 by Mary Hunt.  What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt.  Today, "The Cheapskate Monthly" is read by close to 100,000 Cheapskates.  Click here to subscribe.