Forget every other New Year's resolution you've made — make 2009 the year you get out of debt!

Here are some tips on how to do it:

Make tackling credit card, personal loan and store card debts your number one priority this year — these are the debts that are most likely costing you the most as they have the highest interest rates. While you might not be debt free by 2010, following a few of these tips could see you well on your way to living a debt free life sooner rather than later.

1. Write up a budget

   This might be a cliché, but you'll need to do the basics first to give yourself the best chance of reaching your goal of becoming debt free. From here you can figure out how much cash you have available at the end of each month to tackle your debts — don't get any ideas about spoiling yourself — becoming debt free is the priority.

   Remember, you should only repay an amount that's affordable — don't overstretch yourself.

2. Clear your credit cards

   One easy way to radically reduce the interest you pay on your debts — and therefore pay them off more quickly — is to move all of your credit cards onto a balance transfer deal with another credit card provider. You will pay a far smaller interest rate on certain balance transfer deals which will give you plenty of time to attack your balance.

   Justmoney recommends the current American Express Balance Transfer Card that offers 9.9 percent interest for the first six months (thereafter the regular 23.9 percent). Remember that the lower interest rate will only apply to the debt you transfer, so any new spending you do will be charged at the regular 23.9 percent.

   If you are really committed to ending your debt woes, you'll transfer to the new card, cut up all the old ones and then cut up the new one as well!

   You'll owe the same amount as before, but at a lower interest rate.

   (Click here to take a look at all the credit cards options)

3. Overpay on your personal loans

   Repaying your debts as quickly as you can is the best way to reduce your interest bill. If you have a flexible loan your lender should allow you to make overpayments which will reduce the term. Some loans can be fully repaid early without incurring any nasty early cancellation fees, but do see if this applies to your loan.

   (Visit Justmoney's personal loan guide here)

4. Consolidate expensive short term debt into your home loan

   It is only possible to consolidate your debt if you have a home loan with 'equity' in it (the difference between your property value and mortgage). Debt consolidation can save you a huge amount in interest repayments as your home loan will be your cheapest form of debt. It also means that you will have just one monthly payment. However, be sure you overpay into your home loan every month to avoid paying more interest in the long term.

   (Click here to learn more about debt consolidation)

5. The snowballing effect...

   If you can't get all your debts onto low interest deals, here's what to do:

   Tackle what you owe more effectively by clearing your most expensive debts first, while making sure you keep paying the minimum repayments on your cheaper borrowings.

   So, for instance, say you have a personal loan that charges in excess of 30 percent and a credit card that only charges 23 percent. Pay off as much as you can afford on the personal loan, but only the minimum amount required on the credit card.

   Once the loan has been cleared, use all the freed-up cash to tackle the credit card. Any interest-free debts can be repaid last. This is known as snowballing as your repayments can be rolled up onto the next debt as each one is paid off.

Seek professional advice if your debts are overwhelming you

If, after looking at all the alternatives above, you still can't see light at the end of the tunnel and your debts are a constant worry you can seek help and advice from independent debt advisories and debt counsellors like Debtbusters or start by reading Justmoney's debt management guide.

www.justmoney.co.za

Do you have any tips on clearing your debt for good? Leave a comment below...

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