Are you like countless others walking around with excessive debt? In my opinion, any debt is excessive. There is no such thing as good debt and bad debt: Owing any amount of money is worse than owing none.

Why can’t you pay off your debt and become debt free? To understand the answer to that question, you must understand how the debt cycle works. The cycle is designed to keep you chasing your tail; in order to go from point A (debt) to point B (debt free) — and stay there — you have to stop borrowing money.

That can be a hard concept for some, but not because it doesn’t make sense: People have become too comfortable spending more than they earn. “Stop borrowing money? How can I do that considering I’m barely making enough to pay my bills as is?”

What is the Debt Cycle?

Before addressing the “how,” we must first understand the debt cycle itself:

The goal here is to follow Example 1. You want to move through your debt and get out of it in one straight shot. Unfortunately, this is WAY harder to do than it seems, or even appears on this chart.

Instead of going from Point A to Point B, most people follow Examples 2 and 3, and here we see the cycle of debt.

Example 2 is the person who believes they’ll always have debt. To them, debt is a way of life and there is no way around it. “Everyone is doing it,” they tell themselves. They never come close to debt freedom because they figure, “What’s the point?” In their mind, it’s not an achievable milestone.

Example 3 is the person who really wants to become debt free, but fails to realize what’s keeping them from reaching their true potential – their massive amount of minimum payments.

So, the debt cycle continues, and, in the process, so does the belief that debt freedom is not possible.

It’s time to break that cycle once and for all. Now, the “how”:

Breaking the Cycle of Debt Forever!

I wish I could tell you that the debt solution was easy, but unfortunately it’s not. In order to break the cycle, you have to make changes in how you currently manage your money.

I’m not just talking about cutting your budget or eating out less – although that is a part of the solution. I’m talking about changing your lifestyle. For some people, this is where it gets tricky. This could mean canceling cable and gym memberships or selling expensive electronics, but it can also be as extreme as downsizing your living space.

What YOU need to do depends on how badly you’re in debt, and how badly you want out. Here are six things you can do right now to start your difficult – but necessary – journey to break this cycle.

Live below your means.

This is non-negotiable! Spending more money than you bring in every month has brought you to where you currently are. It’s unsustainable and needs to be addressed – and eliminated! This often requires some radical behavioral changes, which is why it’s the hardest part.

Change your lifestyle.

If your house or apartment is absorbing 40-50% of your net income, you are going to have a hard time feeding your family, paying your utilities and keeping up with the maintenance of everyday life.

Start a budget. (Free budget download)

Knowing and accounting for even the pennies of your income is essential if you want to transform your finances. You have to vigilantly keep track of your spending so you can eliminate unnecessary expenses, giving you the opportunity to complete your next get-out-of-debt task.

Save an emergency fund.

Without this step, you may be unable to achieve your debt-freedom goals. You need this fund in place to cover any emergencies life may throw at you while you’re paying down your debt. Without a buffer in place to cover unexpected emergencies, you’ll end up having to borrow your way out of trouble. Tip: Your credit cards are not your emergency fund, so…

Eliminate all temptation.

Do you have one or more plastic companions keeping you warm at night?  If so, now would be a great time to Shred Your Credit Cards. Not only do they provide a FALSE sense of security, but they also are keeping you in debt. Breaking free from this cycle requires not only dedication, but also the removal of temptation to fall back into old patterns. Changing your habits now and becoming debt free is a great step in the right direction. Don’t look back!

Pay off your debt with enthusiasm.

If you can’t get excited about paying off your debt, success will be that much harder. Get motivated by doing a Dream Budget: Write down your total net income and subtract only your essentials, as if you had no debt at all. How much extra money would you have in your pocket every month to save, invest and even have fun? Get excited about your potential and get busy! Debt freedom is within your grasp, but it’s up to you to break the cycle. No one else is going to do it for you, so you may as well get started.

Have you had a debt pay-off journey of your own? What was the best advice you ever heard while paying off debt? Tell us in our comments section below.

Brad Chaffee is a PerkStreet Customer Columnist who also authors Enemy of Debt, a place where he passionately but candidly tackles the psychological issues related to our own habits and behaviors regarding money. Brad and his family crawled out from under $26,000 of debt and some major bad habits to become debt-free in 20 months, and he believes that if they can do it, you can too! Aside from his blog, you can connect with him on Twitter and Facebook.

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