Reducing debt is the first step to achieving financial freedom. Here are five easy habits that you must develop if you want to stay of debt for good. 

1. Be mindful of spending.

Whether you want to lower your debt or pay it off all together, it's crucial to be conscious of what you spend. Track your expenses to help you see where money is going. David Bach, author of the "Finish Rich" books, encourages you to determine your Latte Factor, or how much extra money you spend each day, week and month of unnecessary items such as a cup of coffee, monthly massages, or a fancy wardrobe. Once you get an idea of how much money you're spending, you can create a financial goal and budget to go along with it. 

Watch this video with our Preferred Partner Cindi Taylor from Big Valley Mortgage to find out if you really need to get out of debt before you buy a home.

2. Create and stick to a budget. 

Create a realistic budget that includes all of your normal expenses. Remember any additional payments you plan to make toward paying down your debt. Some people have a really hard time sticking to a budget. If you are one of those, check out our article on creating an easy budget you can stick to. If that does not work, consider implementing David Bach's automatic savings strategy that he talks about in his books, "Automatic Millionaire" and "Start Late, Finish Rich". 

3. Pay off one debt at a time.

Although you may be in a hurry to pay off your debt, the process takes time. Focus on paying down one debt at a time until it is paid off completely. Not only will this keep you motivated to stay on track, it'll also help you tackle your debt in a sustainable way. 

4. Continue building your emergency savings. 

While you're paying down your debt, continue to save money in your emergency fund. Make sure the amount you set aside allows you to comfortably stay on track with your total spending. Include it as a line item in your budget so you treat it as another expense to pay. 

5. Keep contributing to your retirement. 

If money is tight, consider only temporarily reducing your contribution and look for additional ways to make budget cuts. Make it a goal to increase your retirement funding as soon as you're able. Bach suggests dedicating at least 10% of your income for your retirement with the Pay-Yourself-First philosophy.