The first crucial thing to do is to become very determined to resolve the problem. The more you think about how you can reduce spending and increase income the more likely it is that you will do it. Set spending and income goals and write them down. If you write down your goals you are much more likely to achieve them.



Of course you must stop creating any more debt. Cut credit and store cards up ! You can't keep adding to the problem by continuing to spend. This is quite hard at first but by doing it you will prove to yourself and others that you are serious.

Next, contact your creditors and inform them in a positive way that you intend to tackle the problem and ask them for any help they can offer. You should ask for a lower interest rate or any other incentive they may be able to offer. Don't be too concerned about asking for help, many people who work for these companies have a lot of experience and will often give you ideas you never thought of. Always be very polite but firm and avoid letting anyone upset you. They would far rather you make some repayments rather than none at all and they will probably be very willing to work with you.

If you don't get far asking your existing creditor, and/or you are in debt to less reputable companies or so called 'loan sharks' then you really need to contact some reputable companies to provide some assistance. There are a number of great, honest organizations out there whose mission is to help you work things out with your creditors.

You will not normally shock or surprise them, they get your story everyday and are usually quite willing to help. Provided you are positive about your ability to pay you should get a good response.

Along with negotiating with creditors you should write out a budget. Be as realistic as possible. When you have done this for the first time its much easier for the next and subsequent months. As time progresses check your budget every day. It is incredibly self motivating to see yourself on target. Financial stability can seem a long way off at first but living to a budget soon becomes normal, and it is far easier than you may think at first to break the habit of spending too much money.

If you have several creditors try to pay off those with the highest interest rate first. Aim to pay more than the minimum balance each month. The minimum is only just more than the interest only fee, so even a little extra each month makes a big difference.

Depending on your level of debt you can take out a consolidation loan to pay off your other debts

at a lower interest rate, but for a longer time. This can reduce your monthly payments and make your debt more manageable. This is best if your debts are not too big, and your current borrowing is at a high rate of interest. If you own your own home it is also possible to re-mortgage your house or borrow more against the value of your home, this option is normally at a low interest rate but a long repayment period.

An alternative to further loans is to consider looking for additional income. You may be able to work longer hours at your current place of work or you could find some additional part time opportunities. Sometimes working more itself reduces your incentive to spend.

Another income source is eBay. If you have bought a lot of items which created your debt why not sell them on. Ok so you won't normally get the same money back but you could make a significant inroad into your debt.

Many people have successfully followed this advice and cut their debt by following the common sense steps outlined above, and you can do it as well.