Help to Manage Debt

Having a lot of debt can be overwhelming, but there are practical steps to climbing out of debt. You need to become educated about approaches to debt, get tools that help you organize your finances and plan a strategy for getting out of debt, and work on self discipline. There are many online tools, software and counseling agencies to help you.

Online Resources

There are a lot of online resources: advice and calculators for people who need to know how to manage debt. MSN Money, for example, suggests creating a budget and reducing monthly necessities to 50 or 60 percent of your income and relegating the rest to "wants" and debt payments. Vertex42 has a calculator you can download to an Excel program whereby you list all debts and their interest rates and calculate how various payment options would reduce the debt most quickly and incur the least interest. Bankrate has a debt consolidation calculator to help ascertain how much it would help to consolidate your debts.

Budgeting Software

There are a number of budgeting software applications to help you keep track of your finances. The key to paying off debt, according to MSN Money is to know where your money goes and developing a strategy accordingly. Among the top budgeting software programs. on the website Top 10 Review were Quicken Starter, AceMoney, Moneydance and YNAB. AceMoney costs about $30 while YNAB costs $60. All of them can download transactions from your bank, so you see exactly where your money goes. All but Moneydance let you split transactions between different categories. YNAB has a tool that limits your spending in an area one month if you overspent last month.

Consumer Credit Counseling

Many companies provide consumer credit counseling, and the best ones do it for free. Counselors are certified through a national program and look at your income, expenses, debts and underlying reasons for your financial woes. Then they come up with a plan to help you dig out. Counselors can meet in person, over the phone or via the Internet. MSN Money recommends using counselors affiliated with the Association of Independent Consumer Credit Counseling Agencies or the National Federation for Credit Counseling to ensure quality help either for free or very low fees.

Debt Management Plan

Under some circumstances, consumers may decide to enroll in a debt management plan with the consumer credit counseling agencies. With this plan, counselors add up all the unsecured debts such as credit cards and tell consumers a certain dollar figure they must pay the agency each month. The agency then negotiates down interest rates and fees and pays the debts on behalf of the consumer. For this the agency usually charges a small fee, no more than $50 per month. Counselors usually require that clients destroy their credit cards during this process to avoid getting into further debt.