To start with, make a budget. Total up all your monthly take home pay. Next, start to subtract all of your expenses. You will want to subtract your housing, car, gas, food, entertainment, clothing, insurance just to name a few.
If you aren't sure where your money went, go to your checking account online or in your register. Take a 30 day period and start to categorize your spending. If it's groceries, put the dollar amount under the heading groceries. Do the same for eating out, snacks and drinks, entertainment, clothes, or any other category you discover.
Add up the columns so you have an idea of what you spend on each one for a month. Put those figures into the budget. Once you've completed that task, subtract the total spending from the total income. Hopefully you have a positive number. If not, you need to go through each category and decide where you can cut back until you do have a positive number.
Doing this will allow you to free up extra money to put towards your debt, and will also keep you from going further into debt because you are running out of money each month.
To set up a debt reduction plan, you can go to www.powerpay.org. It's a free website. You will put in all of your debts, including the dollar amount owed, what the interest rate is, and the minimum payment. From there you put in the extra money you have to apply each month. It will calculate how long it will take you to get out of debt, and even print you a calendar showing how much to pay on each debt, each month. (the directions for this sight are right on the homepage on the right hand side).
Another option is to work with a credit counseling agency. They will negotiate lower payments, or lower interest rate, or both with your creditors. From there, you pay them a small monthly fee along with the total new monthly payments and they make your payment for you.
This can be extremely helpful if you are feeling overwhelmed, are receiving phone calls, or can't get out from under the debt due to huge interest rates. You can find a legitimate credit counseling agency at https://nfcc.org/locator/, or if you prefer to work with me, you can contact me through www.consumercredit-dm.com.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.