Debt Management Help

Debt can seem overwhelming. Just facing the reality of how much debt you have and what it is costing you is enough to send you screaming back to the happy land of denial where things only get worse. Fortunately, when you're ready to face the problem, there are many free or inexpensive resources to help you turn what seems insurmountable into little projects and steps that help you climb out of the debt hole.

Budgets and Payoff Plans

Consistently, credit counselors and financial advisers such as Liz Pulliam on MSN Money suggest that if you're serious about paying off debt you must create and adhere to a budget that includes at least 20 percent of after-tax income dedicated to debt payments. Two ways of paying off the debt include the snowball, in which you pay off smallest debts first and "roll" the amount dedicated into that debt toward paying off the next debt; and "avalanche" in which you pay off debts with the highest interest rate first.

Online Tools

MSN Money and other sites also offer free online tools to help you manage your debt. MSN, for example, has a debt evaluation calculator; a calculator to help you estimate your credit score; a calculator to help you figure out if debt consolidation is a good idea; and many articles about tackling debt. (see Resources) Bankrate also has tools such as a debt reduction and mortgage calculator. (see Resources)

Debt Management Software

There are several free debt-management programs that you can download to keep track of what you owe, what your interest rates are costing you and how much you've paid down on each debt. ZilchWorks has been recommended by CBS Moneywatch as of January 2010.

Consumer Credit Counseling

There are many consumer credit counseling agencies and companies. Some are better than others. The Federal Trade Commission recommends looking for counseling help at universities, credit unions or U.S. Cooperative Extension Services offices. Also recommended by MSN Money are agencies listed with the Association of Independent Consumer Credit Counseling Agencies or the National Federation of Credit Counselors. (see Resources) Seek an agency that offers free initial counseling in person or via phone or email. If you elect to have the agency help you pay down debts, make sure to pick one with a small fee and one that is listed with the Better Business Bureau.