Successes with most things in life come down to planning and mindset. Debt elimination and debt consolidation also require planning, action and a mindset. But elimination of debt is far different than consolidating debt.

Let me say from the start my ultimate goal is debt elimination. What exactly do I mean by debt elimination? My goal and mindset is to NOT use or have any need to use debt in my life. To be financially free to spend what I want as I want without going into debt.

Yes this includes the house, cars and big screen TV. For some this may sound like a dream – for others a reality or goal – for me it is a focused mindset.

The term debt consolidation and elimination are often lumped together. People I speak with usually mention them in the same sentence as the same thing - yet they are NOT - at least in my way of thinking.

As I said to reach my goal some planning needed to happen, without it - it was just an idea.

When starting down my path to debt elimination it started with debt consolidation. The consolidation plan may not be in the same traditional method of a consolidation loan but I did explore it and you should too. Look at all your options before taking any steps. However, my method for me was still consolidation.

Here’s the method that worked for my situation with the ultimate goal of debt elimination and not only consolidation.

Think of money and the expenses in your life as piles on laundry. For the guys they may have more trouble with this!

The laundry needs to be sorted before washing.

• Whites
• Light Colors
• Dark Loads
• Specialty – bedding etc.

First the items to be washed are put into one place the laundry basket – like all the bills come into one place. Then the clothes are sorted into piles depending on the criteria as mentioned above. First it was the regular monthly bills or necessities:

• Mortgage or rent
• Utilities
• Insurance
• Food
• etc.

Next we organized all the bills, which may be monthly but could have some items that may not be necessities. Here is where my debt consolidation process started. First, I took all the unnecessary bills or bills that could contain extra charges where I had some control like unpaid credit card balances, payments on other consumer purchases – cable, direct TV, cell phone extras, etc.

The next step was to review each of the bills already consolidated into piles and give them a hard look. Identify any potential extras and eliminate those extras not needed or used. For my family it involved consolidating our cell phones into a family plan making sure we reviewed the needed minutes and changed our plan to one with enough minutes to meet our needs. The charges on minutes when you go over can be very expensive. Any extra features were also eliminated or reduced.

This one small change dropped our monthly cell bill almost $80 per month - from about $230 to about $150. With kids in college they use their cell phone instead of getting a line in their apartment. We consolidated the phones and eliminated extras.

We followed this exercise with all of our bills. It’s surprising how many little extra charges you find on the monthly bills.

Once all the bills were reviewed and cleaned up we felt it was time to attack our next consolidation elimination step. This step involved taking one pile of bills and ranking them based on what which bill we wanted to paid off first and eliminate the debt.

For us it involved reviewing the four credit cards we used and consolidating the credit cards balances into two cards. One credit card for business the Chase Platinum Visa® Business Card and one credit card for personal the Chase Flexible Rewards Platinum Visa® Card - notice both cards provide rewards or points.

When we consolidated the debts we lowered the monthly interest rate on the cards and plan our purchases to not make stupid buys. When we do use our credit cards we get at least some bonus points for later use.

For my business which is online I do have some monthly charges for services. Each of those services was evaluated consolidated if possible and/or eliminated.

This process helped us identify wasted money. This is not about living so tight we do not spend money it is about taking control of our money and using your money wisely. Why not spend it on the family instead of giving it to a company for a service I’m not getting the full benefit of?

Next the focus after consolidating was to eliminate. The “new found” money we saved from other bills we applied to the unpaid balance on one of the credit cards. We put all of our focus on one credit card to eliminate that debt. I can happily report that one card is paid off. It started first with consolidation and end with debt elimination.

That extra money paid on that credit card was then all focused on the other card and we are well on the way of eliminating the debt on that card. By the way that card was from stupid business purchases – but no more.

After that card is paid off all we have left is a car loan to pay off and we are then debt free – the house is paid off. Time to do some serious wealth building!

So you see debt consolidation is a part of a debt elimination plan. You have to find the approach that works for you. For some they go the way of a consolidation loan, others combine debt from multiple credit cards onto one card and others attack one debt at a time.

No matter how approach your debt issues it requires a plan, focus and action. Simply consolidating your bills into one payment does not fix the core problem of unwise or unplanned spending. For us it involved a lifestyle spending change, the result has been a better life with less stress. Now that’s home improvement!