One thing that most debt reductions plans don’t focus on is being able to track your progress; they focus on the debt itself. But having a way to determine where you started and where you are is important to determining the success of the debt reduction plan as well as maintaining your motivation to succeed. Using a worksheet to track your debt reduction goals will give you the best chance possible of getting your finances back under control.

The first thing that should be on a debt reduction worksheet is your total income after taxes. This way you always have a very clear idea of how much money you have to be paying off your debts. Also list all your current living expenses like rent, insurance, utilities, groceries, or school expenses. These are the things you must so before you consider how to pay off your debt.

Next should be all your debts and the repayments you are required to make to them each month. This includes everything from credit cards to payday loans. This column is the column you are trying to work to eliminate.

If you assume that you need to sell your home to pay off your debt then you are likely mistaken. It is a natural assumption to make but most of the time such drastic action is not necessary. However, one thing that most people overlook is all the unnecessary possessions that they have which could be sold to reduce your debt.

If you end up filing bankruptcy or lose your home because of debt are you really going to need that big screen TV? Will that fancy sports car be much fun to show off if its in the repossession yard? Is having 200 pairs of shoes worth the stress your debt is causing you? If the answer is no then you should look at selling some of these fancy things in order to pay off your debt.

Another important thing to track on your debt reduction worksheet is the places that you are cutting costs. Take a long look at that worksheet and see where you need help the most. Cutting back on expensive coffee is great but if that’s the only step you take then it won’t get you anywhere. Try and negotiate your high interest rates first, these are probably eating up most of your income anyway. Perhaps you should consider a debt consolidation loan to reduce the interest rates. These things will make the most difference in your costs.

Remember to update your worksheet often so that you can see the progress you’re making. Seeing measurable change is what will keep you motivated and on the right track to reducing your debt and living debt free.