Maybe you meticulously track every penny spent. Maybe you tend to splurge on dining out or the latest designer fashion. Maybe you just don't make enough money. Whatever your situation, whatever your background and whatever your income, it's all too easy these days to become mired in debt. But how can you dig yourself out?



The first step is to figure out just how much you owe and to whom. Sit down with all your bills and your latest payroll information to get a decent idea of how much you earn and how much you spend. Many find it helpful to use a computer finance program or keep a 'spending journal' for a week to record every tiny expenditure; packs of gum and occasional lattes can really add up!

Once you're familiar with the numbers, create a budget. Be practical: do you really need to dine out four times a week, or could you save money by cooking at home? Be realistic: if you work from home, you probably can't afford to give up home Internet service. Be strict: give as much as you possibly can to those you owe. Plan out every penny you will need for one week and stick to your plan. When you know you can follow your budget, you'll feel confident that you can to break down your debt.

Next, you must prioritize. Always pay off your housing and utility costs first! Keeping a roof above your head is your first priority. Also important to pay are any government liens or tax charges - you don't want to end up in jail. Next in line are loans with high interest rates, such as credit cards. Whittling these down first will save you interest charges in the future. (And pay more than just the minimum payments! Every extra dollar put toward the principle balance is one more dollar you don't owe interest on.)

If you have accounts with payments that are difficult to make, try calling the lender to ask them to work with you. Even if you feel overwhelmed, don't borrow money to pay off debt - you're merely shifting the burden.

If you need more help, don't be ashamed to seek professional debt counseling. But do your research - not all companies are free and not all are equally as helpful.

Regardless of your situation, don't lose hope! With some discipline, patience and help, you CAN erase your debt forever.