If your finances are in a mess, there is no better time to take control. No debt problems are unsolvable. It might not be easy or quick, but there's always a way. Debts are urgent; they grow rapidly over time, and if you're not careful they can get you into serious trouble. The earlier you deal with them, the easier they are to deal with, so we have put together an action plan to help set you on the path to financial freedom. (Learn to be your own credit counselor. See 7 Tips For The Do-It-Yourself Debt Manager.)

TUTORIAL: How To Manage Credit And Debt

Step 1: Get Real

No one ever wants to get into debt, but it comes from spending money you don't have. This could be for frivolous reasons, or you may've had a horrible change in circumstance, such as a partner passing away or medical emergency. Whatever the reason you are in debt, you cannot get back into credit if you are not honest about the situation you are in. Many people with debt do not realize the full extent of it, and many have often hidden the truth from their loved ones. To develop a debt plan it is first crucial that you look at all your debts and what interest rates they are carrying.

Pull out all of your bills and bank statements and find out the total you owe. This step will be difficult, but unless you address it now, you could be building up serious problems for the future. Once you know the total, you can start taking steps to reduce it.

Step 2: Find the Leaks

In order to address the debt, you need to know where your money has been going to get you into the current situation. Carry out two exercises. 1. Go through your bank statements and look at what your money is going on each month. 2. Carry a notepad with you and write down every cent you spend for one month.

You will soon realize that your daily cappuccino, cigarettes or cab fares are mounting up, and even $10 a day would be $3,600 paid off your debts over the course of a year.

Step 3: Stop Spending

This is the most obvious point, but so many people in debt continue shopping, spending, holidaying - utterly oblivious to the mounting debt.

So how are you going to stop spending money? Here are some simple tips that will help you accomplish this.

· Don't carry credit cards around with you.

· Do not make repeated visits to the ATM.

· Tell friends and family what you are trying to achieve so they can both support - and keep an eye on - you.

· Call your credit card companies and ask to decrease your spending limits.

· Do not sign up for any store cards or credit cards - however tempting the initial offer might be.

· Try taking a set amount of money out of the bank at the beginning of the week and giving your card to a friend or family member for safe-keeping. That way you cannot spend more than you have. (Learn how to ditch the rat race with voluntary simple living. Check out Downshift To Simplify Your Life.)

Step 4: Budget, Budget, Budget

If you have debt problems then doing a budget is essential, as you have to get a handle on your outgoings so that money can be freed up to pay off the debt. Your budget will be the road map you need to get to your destination of a debt-free life.

A new spending plan should be developed for each month, detailing your estimated monthly expenditures. To free up as much money as possible for debt repayment, you will need to create a bare-minimum budget including only the essential items. Food, shelter, debt repayments, dependent care and transportation are all essential costs. Consider in which other areas you can cut back and make savings.

For example, could you go carless? If you dig down deep and consider it, there probably is a less-expensive way for you to get back and forth to work each day. Could your household get by with only one car for a while? That wouldn't only save you the cost of paying for the car itself and its upkeep, but for gasoline, insurance, parking. And if you can't go carless, how about trading in your pricey car for one that runs just fine but is used and less luxurious?

In order to get out of debt, you have to start letting your finances rule your lifestyle, not the other way round.

Step 5: Get Saving

Are you getting the best rates on your gas, electricity, water and phone bills? You could save $100s of dollars each year by switching providers. These savings can go straight off your debts.

Step 6: Extra Dollars

By earning extra money you can clear the debt much quicker. But how?

Do you have something you could sell? It could be physical items you no longer need, items that you could make, a skill or a trade? Ebay is a great place to make a little extra cash, or you could even have a good old fashioned garage sale. Every dollar will make a difference.

No doubt you work hard already, but sometimes the only way to get out of debt is by earning extra money. Could you join the millions of Americans who already have second jobs?

Take Action Today

A little credit card debt here and there may not seem too bad - but if it is unplanned overspending, you are setting yourself up for disaster. In bad cases, debt has a dramatic impact on relationships, family and mental health. This isn't over dramatizing. When there is no money left - you can't borrow more, and the creditors are asking for money back which you've no ability to repay.

Take action today. Start at step one, and get real about your debt. (Find out how you can make use of that excess cash and improve your financial situation. Refer to To Invest Or To Reduce Debt, That's The Question.)

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