Begin to Get Out of Debt
Make a personal assessment.
The first step to getting out of debt is to honestly assess your situation. Gather all your bills. Write down the due dates, balances and interest rates for all credit cards so that you can see which debts are costing you the most.
Next, prioritize which payments should be paid first. Determine what you can pay toward any or all debts and, based on that assessment, communicate with your lenders. They might help you come up with a repayment plan you can afford.
Learn from past mistakes.
Once you have worked through your current situation, it's extremely important to learn from any past mistakes to avoid repeating them in the future. Yes, sometimes debt is unavoidable, due to a job loss or illness. But there are many simple ways for you to become more financially solvent in the future.
Make a plan to get out of debt.
First, create a budget and watch what you spend. Track household spending and plan ahead for expenses. Relying too heavily on credit cards each month can lead to dangerous over-consumption. Try paying cash for everyday expenses. It will help you realize the actual cost of simple things like gas and groceries, and nonessential items such as coffee shop lattes and dining out. Careful budgeting and monitoring can help you live within your means.
It is also important to reduce the number of credit cards you use. Avoid using the credit cards that have high interest rates. Always try to pay off the entire balance every month. And if that isn't possible, pay off more than the minimum required by the credit card company. Remember that the only way to become truly debt-free is to pay off the entire balance.
Get help budgeting.
Click here to download a simple and easy-to-use budget calculator. (You will need Microsoft Excel)