Owing money to others is a real pain in the neck.

People are in debt today because of the bad decisions they made in the past. And because of their past, I’ve seen way too many people become depressed and resign themselves to the margins of life as though they’re not worthy of living anymore.

So debt is not only a financial barrier to living a happy life, it’s also psychologically tormenting. Rewinding the videotape of your financial mistakes and dwelling on it will give you nothing but more pain.

I understand that it takes time to accept and be okay with such mistakes, but I don’t think it’s right for you to lose a year or two (or more) of your life wishing you would’ve known better or acted differently. The bottom line is that you didn’t anticipate the financial mess you’re living in right now and had you known different things, you would have acted differently.

So stop beating yourself up.

Whatever financial mistakes you made in the past, whether it’s borrowing money to buy an expensive car, or using your credit card to pay for luxury purchases, or you bet on a bad business, or you’re paying the price of wasting too much money in your 20s, I am here to tell you that there is a way out.

1. Understand Your Spending Habits

You first need to get rid of the idea that you’re going to wake up one day and you won’t have any more debt. Don’t live in the past or in the future. You have to live in the now…and I believe that the only way to eliminate your debt is to consistently reduce it each and every month. There’s no other magic way.

Begin by paying attention to your spending habits.

How often do you go out and buy a new shirt, a new top, new jeans, or stop at the drive thru before you get home? What about online purchases? How often do you shop online? What about phones? Do you have to have the newest gadget all the time? A lot of these things will bite off a chunk of your money each month, so begin by looking at those expenses carefully.

You also have to analyze your spending habits.

What triggers them? Why do you make such purchases?

People spend their money because they’re bored, stressed, lazy, use it as coping mechanism with new situations, to fit in with their social group, and so on and so forth. Once you’ve identified your trigger, recognize that you have to replace spending money with something else; like calling a friend and chatting with that person until the urge is gone. Or you can choose to practice mindfulness and make a conscious choice to accept the presence of the urge and decide not to act on it. There’s really no hack to not spending money. You just have to get used to not spending money and to strengthen your saving muscle. See my article on saving: how to get rich by tomorrow.

You also have to get clear on your priorities as fast as possible. And that means you should care less about “fitting in” with your social group or to buy a muffin to go with your coffee. If you’re in debt, your number one priority is to get out of debt.

That’s it.

2. Use the Envelope System

If you’re having an issue with controlling your spending, then try the envelope system. The basic idea behind this method is to allocate your money beforehand to your monthly bills.

You basically put the required amount of cash into envelopes and put the rest in your savings account.

So pick out a few envelopes and categorize them based on the bills you have to pay. Write the name of the bill or expense on the envelope and when you get paid, draw out the required amount in cash and put it in those envelopes. This will prevent you from having direct access to your money through your debit account and that will make it more likely for you not to spend and to focus on paying off your debt.

3. Make it Hard to Spend

The approach that works best for most people is to make it really hard to spend money.

Keep your credit and debit cards at home. In fact, some people freeze their credit cards in a cube of ice and leave it in the freezer. Do you know how much of hassle it is to melt off the ice and use your card when you feel the urge to spend? You really won’t do so unless it’s an emergency.

Try to carry in your wallet less than $20 and preferably less than $10 and see how long you can last without spending it. When I have less than $10 in my pocket, I find ways to be fine without a second cup of coffee or a muffin or whatever. I use the $10 wisely and try to get the most out of it. Going for a week with only $10 in your wallet is another great way to learn about your spending habits and urges.

It will also teach you to stick to a budget.

For example, when I absolutely need to go shopping, I leave the house with an exact budget. So even if there’s a better deal out there that is a few dollars extra, I won’t buy it. I only allow myself to buy whatever meets the budget I have with me. It can save you a lot of money.

4. Decide to Take on a Minimalism Challenge

I took on a minimalism challenge to test how much I can go without spending money. You can read about it here.

In that challenge, I went for a year and a half without purchasing a single clothing item. In fact, I didn’t buy anything for that matter except for the rare sandwich here and there.

I also found myself having a lot of time which I was able to dedicate to working on projects I am passionate about. People underestimate how much time they waste when they’re out shopping and looking for a good deal. If you’re in debt, you don’t need a good deal. You need extra time to work on a second job or invest in building a set of skills that can you help you start a business.

Try out minimalism for a month or two and see what difference it can make to your time and finances.

Finally, don’t ever think that you’re doomed to live a life an unhappy life because of the bad habits you formed in the past. There’s a way out and it starts with what you’re going to do right now.