Solution for Debt

Debt is a condition that can get out of control if you do not acknowledge it and take control of your spending habits. Getting into debt is not a difficult feat, but getting out of it is a struggle that requires time and commitment. Ridding yourself of debt can result in a better credit score and a sense of freedom.

Create a Budget

Creating a budget allows you to compare your monthly income and expenses so you gain control over your finances. When creating a budget, list how much you must spend on bills and essential items in one section and how much you usually spend on nonessential expenses, such as eating out for lunch, coffee, clothes and memberships. Essential items include rent or mortgage, insurance, utility bills, credit card bills, groceries, loans and medical needs. Examine the amount of money you spend on nonessential items, find ways to reduce costs and adjust your budget accordingly. Ways you can save money include using coupons, making your own coffee at home or the office instead of purchasing it at a caf and making your own lunch instead of eating at a restaurant. In your budget, plan to use the money you save to help you pay your debt.

Knowing Debt Details

It will be difficult to find a solution for debt if your do not know how much debt you owe. In addition to creating a budget, take note of how much money you owe each creditor, the minimum monthly payments required, interest rates and the amount of time it will take to pay each debt. You can also notate how much you can afford to make in minimum monthly payments if you cannot afford to pay more. This analysis can help you see which debts you can eliminate the fastest. Financial adviser Dave Ramsey states an individual in debt should attempt to pay off the smallest debt amounts first so she can have more money to pay for the larger debts.

Credit Card Company Assistance

If you find it difficult to make the minimum monthly credit card payments, contact your credit card company. Credit card companies often offer customer assistance programs that lower a customer's interest rate or minimum monthly payment amount. When you call a credit card company, explain your financial situation to the customer service agent, and let him know that you do want to pay your bill, but find this task difficult. Most credit card companies prefer to receive a reduced payment than no payment at all, and are willing to work with customers experiencing financial hardships.

Debt Consolidation Program

Instead of owing money to various creditors, you can pay just one lender through a debt consolidation program. In this type of program, the credit counseling company pays off your debts on your behalf. Then, you only have to make payments to one creditor, which is the credit consolidation company. This type of program may offer lower interest rates than you were paying, but might also charge service fees.