In the past few years, many people have become dependent on the credit that they have established to help them buy the things they need and do the things they want. When credit is used wisely, it is a very good thing. It does allow people to do more than they used to and to enjoy some of the things they like. When credit is abused, it can create myriad of problems that can cause people to lose their marriages, their jobs, etc.
If you have already built up more debt than you should have, it is not too late. The great thing about debt is that there is a solution. If you have more debt than you can afford, you can pay it off. There are some basic steps that most people can take to gain control over their debt and eventually live debt free.
1. Figure out how much you owe. It is important that you make a list of all of the people and businesses that you owe money to. This includes credit card, bank loans, car loans, friends and family. You can prioritize this list based on your own judgment.
2. Figure out how much you make. Take into account all of the sources of income that you have and know exactly how much you make on a weekly, monthly and annual basis.
3. Figure out how much you spend. If you have to, write down every penny that you spend for a period of 20 days. Keep track of the cup of coffee you buy in the morning, all of the bills you pay, the cost of utilities and anything else that you spend any money on.
Use the list of your income and spending to determine what you have to have and what you can eliminate. The more spending that you can eliminate, the more money you can use to pay off your debt.
Pay off your bills in order of priority and celebrate each one that has a zero balance. This will help motivate you to keep up until all of your debt is cleared and you can enjoy the things that you own free and clear.