Last weekend I attended The Money Conference for Women in Hartford, CT. A 26-year-old woman stood up and shared how she is more than $60,000 in debt as a result of student loans and credit cards. She makes about $40,000 a year working for a non-profit and one of her immediate goals was to purchase a home. The keynote speaker, Michelle Singletary, a nationally syndicated columnist, told her to pump her breaks and focus on paying off her debt first. Her story is all too familiar. A lot of people want to take on more debt before addressing their current issues. Although she probably wouldn't get approved for a mortgage with today's tight restrictions, my point is that prior to taking on the duty of a mortgage make sure that you are ready. Getting into a legally binding financial commitment that can last for several decades is no joke. Angela L. Barrow, a home mortgage consultant for Wells Fargo Bank and this week's speaker at the Bedford Central Community Development Corp. homebuyers seminar series, talked to us about how to eliminate debt, how to create a budget, and how to set realistic goals. For this young woman, homeownership is attainable but should be a long-term goal. If you're thinking about purchasing a home in the near future, now is the time to go on a financial diet and clean up your credit. ELIMINATE DEBT "You have to change your current behavior,†says Barrow. "Be honest and draw the line.†Follow these steps: Gather all your bills, list all your balances, list all your interest rates, and finally list all your minimum monthly payments. Identify the bills that you can get rid of quickly and then set a goal. Say, "I'm going to pay bill X off first in X amount of time.†Continue to make the minimum payment on your other bills. Repeat this for each debt. To eliminate debt, it is imperative that you pay your bills on time. "A late payment can drop your credit score 50 to 60 points,†says Barrow. If you're late with one card, you're other cards can increase their rates too. This is called a universal interest rate. Also, look into overdraft protection to avoid penalties on your credit cards. You can opt out by calling your bank. They will set up your account so that if you don't have enough funds for a purchase the bank will deny the charge to prevent overdraft fees. CREATE A BUDGET Start pinching your pennies. A budget estimates income and expenses. It will help you to determine exactly what you have coming in and going out and what you need to save in order to achieve your financial goals. A colleague of mine shared a great website with me that tracks spending. Visit Mint.com, download the free software and you can instantly see your spending habits and where you can cut back. To help stay on track with your budget look into decreasing your cable/internet/phone package, bring your lunch to work, walk when possible, clip coupons, unplug appliances to reduce your electricity bill and do personal hygiene stuff on your own such as your hair and nails. I know I got an eye-roll for the last suggestion, but hey, I didn't say it was going to be easy. SET GOALS It is said that individuals who write down their goals are more likely to accomplish them. Here are six steps Barrow provided to help achieve life goals: -   Write your goals down -   Be specific -   Create a time line to achieve it -   Develop a plan. Ask yourself: How do I get there? How much money do I need to reach that goal? -   Establish a price that you are willing to pay for that goal -   Think about your goal everyday. Barrow suggest looking for pictures in magazines of your dream home to hang somewhere you can see it everyday. You can also create a vision board; check out our post, "Clear The Way" (which was also published in the Motivation section of the August 2009 issue of Black Enterprise magazine) to learn how. Happy Thanksgiving and thanks for following. We'll resume after the holiday. Got a question or comment? Follow me at www.twitter.com/LaToyaReports or leave a reply in the space below. Other posts in The Homebuyers Toolkit series: Getting Started Qualifying For A Mortgage Key Players Let's Talk Money Building Financial Security How Your Credit Score Adds Up Renting vs. Buying LaToya M. Smith is an editorial assistant at Black Enterprise