I began this debt blog, which I called Debt Reduction Formula, in September of 2007.

That happened to be the same month I sold my home in Highlands Ranch, Colorado, and moved into a rental home in Parker, Colorado.

At the time, I owed $75,286.38 in debt. I was really feeling the pressure of the debt I owed and felt I needed to do something proactive to get it under control.

So I started this blog.

I proceeded to pay down my debt consistently, reporting on my progress each month.

From September 2007 until May 2009, I reduced my debt by $45,192 — a 60% reduction in 18 months. In May 2009, I predicted that I might be out of debt by early 2010.

My prediction has not come true.

I’m still in debt, and the amount I owe today in September of 2011 is actually more than what I owed in May 2009. As of today, I owe $39,289.89 — about $9K more than I owed two years ago. (This figure includes my car debts. I still have no mortgage.)

This is a little bit embarrassing to admit because I really thought I would’ve done better. But I haven’t.

You see, in 2010, I shifted my focus from paying off debt to growing my business, raising my three kids, moving my family to another rental, and various other things. I stopped publishing my monthly debt update. In fact, I stopped tracking my debt altogether.

As a result, my debt has bounced up and down and ultimately increased.

Which brings me to the primary point of this article: Tracking and reporting how much you owe on a public debt blog keeps you focused on becoming debt free… and… actually helps to reduce debt. My results from September 2007 through May 2009 are proof of that.

But without the accountability that a debt blog provides, it’s quite easy to slip back into old habits. And even if you don’t slip back into old habits, it’s still easy to grow complacent and simply lose track of your debt.

When it comes to debt, a little bit here and a little bit there can add up to a whole lot.

Today, I finally updated my outstanding debt and was shocked to discover that I had not updated my spreadsheet in 13 months. And so I’ve realized that I need to continue updating this debt blog to continue my journey to become debt free.

And that’s what I plan to do.

By the way, here’s the latest spreadsheet with balances I’m carrying. My debt in August 2010 was $25,460.82. I bought a second vehicle in October 2010, which is why there is a substantial increase from then until now.

Outstanding Debt as of September 14, 2011

Getting out of debt is not always a straightforward process, especially if you’re self-employed like I am.

Last year, I made some business investments that didn’t pay off quite as well as I wanted. As a result, I had to tap my line of credit in late fall and again in January to pay taxes.

With a job, you have predictable income. But in business, cash flow can often be erratic and unpredictable.

The income inconsistencies in business can make getting out of debt a bit more of a challenge. At least, that has been my experience the last couple years.

I’ve taken a lot of steps forward, and a few steps back. The good news is I’m still moving in the right direction… even if I have a bad month or two. I’m aware of what’s happening and know what I need to do to keep moving ahead.

I share all this with you so that you don’t get overly discouraged if your journey out of debt isn’t as straightforward as you thought it would be.

Just keep your eye on the prize (being debt free) and keep doing what’s necessary to get there.

And don’t let a bad month or two derail you. You can do this.

If you’re burdened with your unpaid bills and want to get out of financial trouble, you may opt for debt consolidation programs. With the help of these programs you can simplify your debts and become debt free.

Debt consolidation programs

A debt consolidation program combines all your multiple debts into a single one. Whether or not you will be eligible for the program will depend upon several factors, like, your credit report, amount of debt you owe, your current income, etc.

All your unsecured debts will be consolidated into a single one. You may have to take a new loan for this, at a lower interest rate. It will be easier for you to make a single payment towards the new loan, instead of paying multiple creditors.

You may take a home equity loan or a new debt consolidation loan to consolidate your multiple debts into a new one. If you take a new loan you may have to use your home or car as collateral.

You will need to negotiate with your creditors to consolidate your unpaid debts, with a new loan at a lower interest rate. You may do this negotiation on your own or get the help of third-party professionals to find out the most suitable consolidation program for you and do the negotiation, on your behalf.

Benefits of a consolidation program

A consolidation program has several benefits which are mentioned below:

• Single payment: This program helps you to make a repayment plan according to how much you can afford. Once your creditors approve the plan, you have to make a single monthly payment to pay off your debt.

• Counseling: If you opt for a consolidation program with a consolidation company, they will do counseling with you to help you realize your financial goals.

• Negotiation with creditors: The consolidation company also negotiates with your creditors, on your behalf, to lower your interest rate and waive off your fees towards late payments.

• Less time: If you opt for a consolidation program, you may get rid off your debts in 4 to 6 years. Thus, in a very short time you will be able to attain freedom from debt.

Debt consolidation programs are beneficial for you if it really helps you to get rid off your debts in a shorter time. With the help of this program you can also pay less than the amount you actually owed. However, you need to be aware of the fraudulent companies and avoid those.

How to avoid fraudulent companies

To avoid scam companies, you need to find the reliable and authentic companies, based on the following factors:

• Proper license holder: Every state has its own list of license-holder companies. Prior to enrolling for a consolidation program with a company, you should make sure that it has a valid license. You can get the list of license-holder companies from the office of the attorney general.

• BBB rating: Every registered company receives a grade from the Better Business Bureau. You can see the rating of the company to know about its credibility.

• FTC: The Federal Trade Commission has a list of companies against which the customers have lodged any sort of complaint. Before selecting a company you can check with the FTC list and find out whether or not the company is reliable.

• Consult with relief networks: You can take help of people associated with relief networks. It has experienced people concerned with debt, so you will get authentic advice/suggestions on the program you may want to opt for.

If you want to opt for debt consolidation programs, you should choose reliable and authentic agencies. You can get list of authorized agencies from the Yellow Pages or from the Internet. You can also get references from friends and neighbors.

Before finalizing with an agency you should make sure that it has legal accreditations so you do not fall prey to a scam and lose your hard-earned money.

About the Author: Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributor to other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like Credit Score: The Quintessential Therapy for a Happy Pocket, Take Creditors and Collection Agencies to Small Claims Court, and My Story- From Depression to a Smile.

Consumer debt is the kind of debt you put on credit cards and other types of revolving retail accounts.

What makes this kind of debt so odious is: There are no fixed minimum payments. And there is no fixed term in which to clear the debt. You could be making (mostly interest) payments for decades.

It’s not that hard to rack up large amounts of consumer debt shopping at malls, retail stores, and department stores. Twenty dollars here, twenty dollars there… next thing you know you’ve got some serious financial obligations.

My wife stumbled on a show last night called Clean House: Search for the Messiest Home in the Country. This show shines a light on families who have shopping, hoarding, and cleanliness/organization problems.

Sharon Baglien: Shopaholic in Denial

Last night was a re-run of the third episode of Clean House in which the crew tackled Sharon Baglien’s home in Cincinnati, Ohio. From the first scene, I could not believe what I was seeing. Baglien’s house, garage, attic, basement, and an off-site storage unit were crammed floor-to-ceiling with junk.

I say “junk” because not much of it was getting any use. But the truth is, most of the junk was brand new — still in the box, tags intact!

There was so much stuff in the attic that the ceiling was cracking. There was nowhere to sit for meals. And when the house was finally emptied, it took 400 50-gallon plastic containers, 75 large packing boxes, and 300 large garbage bags to hold everything.

The show’s crew then had to rent a 7,000 sq ft space for the “yard sale” to sell all of Sharon Baglien’s stuff. I was truly stunned.

But what stunned me more than anything else was Sharon’s persistent denial. She repeatedly denied being a shopaholic. She repeatedly excused her own behavior by saying that it was “just 30 years’ worth of accumulation” — as if the amount of time that had passed made everything okay!

If I accumulated for 30 years straight, I wouldn’t have had even a fifth of what this woman had in her house.

Anyway, with such an addiction to shopping and hoarding (she had been paying monthly rent for a storage unit for decades), I have to imagine that Sharon is also facing some substantial consumer debt. And while her situation is extreme, it paints a vivid cautionary picture.

The Problem with Consumer Debt

The problem with consumer debt is that it must be paid off by the sweat of your brow. Clothes and food and dishes and kitchen gadgets and “stuff” all depreciate rapidly. In most cases, you’d be lucky to get pennies on the dollar when you tried to resell your stuff, even if it was barely used.

Cars depreciate, too, but not nearly as fast as consumer goods.

This is a unique quality of consumer debt when compared to secured debt. Debt that is secured can usually be cleared by simply selling whatever was used to secure the debt.

Consumer debt, on the other hand, cannot be cleared by selling the items you purchased. Unfortunately, you will have to work off the debt — or settle it, or declare bankruptcy. And none of those is much fun.

Secured vs. Consumer Debt Ratio

As you take stock of your own finances, pay close attention to the ratio between your consumer debt and secured debt. If you have debt, it’s better to have secured debt.

There was a time not that long ago when the majority of my debt was consumer debt. Now that has changed. I mostly have secured debt now. Which means that in a pinch I could liquidate a few items and clear my debts quickly.

(Of course, being debt free is best of all, but I’m not there yet.)

Another option that I recommend is consolidating consumer debt into a Prosper loan. I did this at one point and it worked really well for me.

What’s nice about a Prosper loan is that there is a fixed monthly payment and there is a fixed pay-off date. You’re not making payments for the rest of your life. The whole point is to pay off the loan. (This is in contrast to credit card companies who want you to carry balances forever.)

Remember: Consumer debt can be ugly. So stay away from it as much as you possibly can. And if you have consumer debt, develop a plan for how and when you’re going to pay it off.

Here’s how to become debt free in four simple steps:

First, you need to assess your current financial situation. It’s kind of like going to the doctor for a physical exam, except this time you’re examining your outstanding loan balances, your monthly income, your monthly expenses, etc.

You need to have a clear picture of how much you owe, how much you make, and how much you spend. This will tell you how bad (or how good) your financial situation is.

Second, you need to look for ways to trim expenses. Some of the best expenses to cut are those that are a) frivolous and b) recurring. Frivolous expenses that get auto-charged to you every month need to be eliminated if you truly want to become debt free.

Look also for ways to save money: on your cars, your house, your food, your health, your entertainment, etc. For many families, it is actually quite easy to cut $100 or even $200 in monthly expenses without much trouble.

Third, you need to put together a plan for credit card debt reduction. Depending on your circumstances, you may want to put together a debt snowball plan. Or you may want to seek Christian debt reduction help.

Every situation is unique and there are no one-size-fits-all solutions. So consider carefully what the best course of action is for you and your family.

Fourth, you will want to increase your income. This is the step that is sometimes hardest. But it is the one step that can really accelerate how fast you become debt free.

You might consider starting a side-business. Your options are endless. There are dozens of opportunities for service-based businesses, as well as online businesses. You may also consider taking a second part-time job.

Okay. These four steps cover the basics. Now here’s the secret…

The Secret to Become Debt Free

So far, I’ve given you the four simple steps to become debt free. But I’ve left out the biggest secret of them all.

The secret is consistency.

It’s always easy to get excited about doing something and pursue it with a passion for a couple weeks or even a couple months. The true challenge is what you do when the excitement wears off and you’re tempted to buy some shiny new toy.

Here’s the truth: You can spend 6 months, a year, or even 2 years following your plan to become debt free. But all it takes is one weak moment to erase all that progress.

Similar to the person who loses 10 pounds and gains back 15, it’s easy take 2 steps forward and 3 steps back — and actually find yourself in a worse financial position than when you started!

So consistency is key. But so is the ability to pick yourself up when you’ve made a mistake. Because, honestly, it’s almost inevitable that you’ll make mistakes along the way to become debt free.

The question is: Will you have the resiliency to forgive yourself, get back on track, and keep moving forward? Only you can answer that question.