Faced with record high personal debt levels and ultra-low savings rates, it may be worthwhile for Americans to consider taking the hard way out of debt.

When people talk about getting their personal finances in order, they usually try to find the easy way to reduce debt and increase savings.

There are a number of steps you can take that are relatively pain-free and low-cost that will help get you on your way to a better financial position, but this is taking the long term approach. Little steps over a long period of time will add up to big amounts, but it's not the only way to achieve financial freedom.

Another option is to take the hard route. More from TheStreet.com:

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Instead of making small changes, make big changes which can have a large impact. The advantage is that you can put a huge dent into any debt you might have or supercharge your saving rate, with large increases over a short period of time. Here are 10 hard ways to get your finances in order.

1. Downsize your house. Instead of buying the biggest house you can afford, live in the smallest house you can find. Sell your current house and buy one that is half the size or even smaller. Challenge yourself to find the smallest space that you can stand to live in.

Take a chapter out of your college days and think one-bedroom or studio apartment (or a lot of roommates). Though it's not easy to live small when everyone around you is living large, your finances will be healthy and well in no time as those around you struggle to make their mortgage payments.


2. Save 50%+ of your income. Saving 10% of your income is the common recommendation, but you can do a lot better than that. Shoot for saving 50% or more of your take home pay. With a bit of effort, anyone can save 10% of their income, but it takes discipline and effort to live on only 50% of your income. By doing so, you will ensure you don't have any financial problems and that you can retire years, if not decades, earlier than your coworkers.

3. Eliminate your gadgets. Think about this for a second: 30 years ago you didn't have Apple iPods, cellphones, computers, DVD players and a lot of the other gadgets that are deemed "essential" today. Throw in the big, flat screen TV and get rid of them all.

You can get your news from a newspaper at your local library, where you can also check email or use the computer. Not only will you save hundreds a month on subscription costs, you'll save thousands of dollars a year on hardware costs. While there is no doubt that many of today's gadgets are convenient, it is readily possible to live without them if you are committed.

4. Eliminate your car. The truth is that you don't really need your car. Yes, it's a lot more convenient than not having one, but it's possible to get by without one. You will have to adjust your schedule around others who do have cars and learn to love public transportation.

On the occasions when you do need a car, renting one is still possible. Not only do you eliminate car payments, gas costs, repair bills and insurance costs, the extra movement will slim you down while it fattens your wallet.


5. Only buy used. New is nice, but there are very few items that you need to purchase new. Learn to buy everything you want used or don't buy it at all. eBay, Craigslist, second-hand shops, flea markets and garage sales will be your new shopping grounds. This should reduce your spending by 50% or more and with a bit of work and a good eye, you'll be the only one to know you didn't pay retail prices.

6. Buy one, donate three. You know that you have too much stuff and your closets and other storage areas prove it. If you really want to purchase something, vow to donate, sell or get rid of three items for every one that you buy. If you want that new shirt, those new shoes or a new book, you have to give up three of each to get it.

No, it's not easy giving things you have up, but this will ensure that you only buy things that you really want and avoid gathering that 80% of junk that most people buy but no longer use.

7. Make Christmas a no-spend holiday. Decide that you are opting out of the commercialism of Christmas or whatever winter holiday you celebrate and turn it into a no-spend holiday. Instead, go back to the roots of what the holiday is supposed to mean. It will not be easy and friends and family may not understand, but not only will you save a bundle of money, you'll have a lot less stress while getting more meaning out of the holidays.


8. Don't eat out. That's right. Breakfast, lunch and dinner are all made at your kitchen at home. No exceptions for snacks (no trips to the bakery or the office vending machine) and coffee (sorry Starbucks) as well. If it goes into your mouth, it is prepared by you from your kitchen. This means putting aside time to prepare meals and snacks and taking everything with you when you leave your house. Though not easy, the results will dramatically improve both to your health and your pocket book.

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9. Don't pay for entertainment. There was a time when we had to entertain ourselves and although it might be difficult to give up paid entertainment, it's possible to go back to those roots and find your entertainment for free. You likely have to look a little harder, be a little more creative and be a bit more active, but there are plenty of opportunities to trade in paid entertainment for activities that are free -- walks, hikes, bike rides, concerts in the park to name just a few.

Getting your entertainment at no cost means more effort on your part, but you'll find things that satisfy your interests much more while also giving a boost to your bank account.

10. Start your own business. More work after work is not what most people would consider easy, but it's a great way to help your finances. It means working a double shift; eight hours at your current job and then when you get home, another eight on building your new business.

It takes time and patience to build a new business, as well as a lot of effort, so pick one that you enjoy. Whether your part-time business makes a little to supplement your regular income or grows so that it's making as much as your regular job, it will help your bottom line.

Upon reading this list, you probably decided that all of these suggestions are impossible for you -- before even thinking of a strategy on how each could be accomplished.

Again, these are hard ways to improve your finances, but adopting any of them can change your financial outlook for the better both quickly and dramatically.

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