If you have gotten yourself into debt over your head, you are probably wondering, should you consolidate your debts? It can help you manage matters and get those debts paid off, but it isn't for everyone. In addition, some people qualify for credit counseling, which will help you pay off your debts by reducing the interest and payments for each. Hopefully you can get out of debt without going this far.

The first step to getting your debts under control is to write out your exact income and outgo for a couple of months. Find out exactly how much you owe and how much you have coming in. How does it look on paper?

A rule of thumb is that you should be able to pay twice the minimum on each debt, save ten percent of your income for emergencies, and still be able to pay your utility bills and buy your groceries. If you do not have enough income to do this, debt consolidation might help. If you do have enough income to do this, you are probably better off to find ways to spend less and chisel away at your debt load that way.

If you find yourself using credit cards for things like food and laundry detergent, you are probably overextended on bills. Debt consolidation or going to a credit counseling agency can help you. Which ever route you choose to go, you can make a big impact on your financial situation by living more frugally. Find ways to cut back on those basic bills. Do you really need your cable TV? Could you get a cheaper cell phone plan? Can you transfer high interest credit card balances over onto lower interest cards?

Many of the things we spend on are convenience expenses because we are so busy we can't do things for ourselves. Fast foods, restaurant meals, and convenience groceries all cost more than cooking for yourself from scratch. But who has time to cook from scratch any more? It's actually a vicious cycle - the job brings in more money, but you have to spend more money for the privilege of working!

With credit counseling, you provide a list of all your bills to the counselor. You must destroy your credit cards and can buy nothing on credit once you enlist their services. They will negotiate with your creditors to reduce the payments and the interest rates on your bills. They will then determine a single monthly bill which you must pay to the credit counseling agency. They in turn will pay your bills for you.

Debt consolidation just means that a loan from a bank is used to cover all the debts and you make a single payment to the bank. Again, it is important not to go on using your credit cards! We live in a affluent age with lots of options for spending money. Remember that all those things you think you need really won't make you happy in the long run.

Learn to enjoy the simple and free pleasures. Read library books instead of buying your own. A four dollar magazine might not seem like much of an expense, but you can save it by checking the magazine out of the library. That four dollars can be applied to your debts. Little by little, big debts, whether you choose to consolidate your debts or not, can be whittled down. You can one day be debt free if you really want to.