Debt consolidation starts by assessing the problem and causes

The problem of rampant debt is one that is rapidly taking over this country. Credit is easier to get than ever and people can’t stop using it. That, combined with rising interest rates and high gasoline prices, has made managing money almost impossible for many people, who are finding themselves overwhelmed with debt. The key to getting out of the cycle of debt is to start by getting organized and examining the problem. After that, you can tackle it in an orderly fashion.

No one gets into debt overnight, and no one will get out of it overnight. You got there by spending more than you earn over a long period of time. You will get out of it by paying back more than you spend over a long period of time. It’s that simple.

Here are some tips for how you can manage your debt:

• Look at your debt. What do you owe and to whom do you owe it? Getting some idea of exactly what your obligations are is the first step in getting your debt in order. 
• Look at your spending. Make a list of every penny you spend each month. Where is the money going? If you have complete list of every cent you spend each month, you will then be able to start cutting back on unnecessary expenses. Be prepared; it’s going to hurt.
• Sort your debts. A good place to start is to pay off the smallest debts first. Then you can take on the larger ones. Be careful if you are moving debts from one credit card to another; the fees associated with transfers are sometimes rather high.

• Cut back on those unnecessary expenses and use them to pay your credit card debt. That might mean taking a lunch to work, forgoing the daily latte at your local Starbucks or doing without HBO. Take the money you save (those lattes add up) and send it to your credit card company. Try to pay at least double the minimum credit card payment if you can. Paying the minimum could take you decades to pay off your debt; paying twice that should reduce your payments to just a few years.
• Check your credit report for debts you may have forgotten about or for inaccuracies. It always helps to see how you look to creditors. You can get a free copy of your credit report at annualcreditreport.com.
• See a credit counselor if you really can’t make any progress. They may be able to help you. Sometimes, especially in extreme cases, bankruptcy is inevitable. A good counselor will be able to let you know.

There is no easy way to get out of debt. It took time to get there and it will take time to get out. The key is to take a good look at the overall problem and to take an organized approach to paying it off. Thousands of people have done it. It’s possible, and the satisfaction of getting out of debt makes it all worthwhile.

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