I think it would be a valid assumption to make that most people are carrying some form of debt. From mortgages, car loans, student and personal loans, to credit cards, their are a lot of ways that you can get yourself in debt. Unfortunately there aren’t as many different ways to get yourself out of debt. Let me be perfectly clear with this:

The only way to get out of debt is to pay back the money owed.

I’ve seen and heard many different plans or tactics that are supposed to help get people out of debt, but they at best de-emphasize the fact that you have to pay back what you’ve borrowed. You can do 0% balance transfers from credit card to credit card, and while this can lower the associated finance charges, it does nothing to reduce the actual balance owed. You can also take out some sort of home equity loan to pay off and consolidate other debt, but this again doesn’t actually reduce any outstanding balance. It’s merely another way to shift the debt and reduce finance charges.

Many people are also wanting to refinance their homes, which can be a good move depending on the reasons behind it, but it may not be the best thing for your finances. If you’ve had your mortgage for a number of years and decide to refinance, it’s very possible that you could lower your monthly payment. Just remember that you’ll also be pushing the final payoff date further into the future and in turn paying even more in interest.

Whatever fancy tactics and strategies you may hear about that are supposed to be some debt elimination magic pill, remember that the only way to eliminate your debt is to actually pay off the originally borrowed principal balance.

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