Getting out of debt is not just about improving your finances, it's about improving your quality of life.
Take credit cards.
Today's average card charges 17 percent interest, and an average cardholder carries a $5,000 balance, says Marc Eisenson, editor of Good Advice Press (www.goodadvicepress.com) and co-author of several personal-finance books. With interest, that $5,000 loan can easily cost $16,000 to pay off - after taxes.
Counting taxes (in the 28 percent tax bracket), you have to make $4 to cover every dollar you spend on the credit card, Mr. Eisenson says.
That dramatically increases the cost of living.
Getting the credit monkey off your back "dramatically cuts the cost of living. And if you dramatically cut your cost of living, you have all kinds of options that you don't have if you're always slightly behind," explains Nancy Castleman, one of Eisenson's co-authors.
Ms. Castleman and Eisenson recommend eliminating household debt, including home mortgages. But even reducing debt to a manageable level can make a big difference, they say.
To get started, many debt counselors recommend you list every expenditure for a month. Then you can see how much you spend on, say, pizza delivery, and decide where to cut back.
If all that record keeping is too much, "at a minimum, use that spare change that you throw up on the dresser every night" to pay down debt, Eisenson says.
Eighty-three cents a day adds up to more than $25 a month. Put that money toward paying down a $100,000, 30-year mortgage, and you could save some $20,000. An extra dime a day -$3 a month - can save $1,000 and more than nine years of payments on an average credit-card balance.
It's also a good investment.