by Stefanina Hill

Created on: December 30, 2009

Being in debt is worrying and stressful but it can also devastate a person’s entire life as well. Debt was once seen by many people as a normal part of life but the recent recession has provided too many examples of how a reliance on debt can leave people destitute.

Managing your money is the key to getting and staying out of debt. In order to get out of debt you need to be willing to embrace change, money management is a different lifestyle to one of spending without restraint and incurring debt. If you want your financial situation to change then the way you live will have to change also. Accepting this fact is essential to success.

Sit down and use either pen and paper or a spreadsheet package to create an overview of all your incoming funds, expenses and assets. Include your debts in the overview. List the interest payments you are being charged as well as the amounts you owe to each company.

In order for this overview to be helpful it must be complete and you must not omit to list items which you would rather not admit to. If you don’t know what you’re earning and spending in black and white then money management is not taking place.

The next step in getting out of debt is to use the overview you have made to establish a debt repayment budget. By making changes to the way you spend and earn money you can have funds spare at the end of every month.

Make an assessment of your overview and identify any item which is a non essential expense. Anything which is not absolutely needed to work, have a place to live and eat is nonessential. Examples of nonessential expenses include cigarettes, alcohol, entertainment, luxuries and socialising. All of these expenses should be eliminated from your budget to make way for debt repayment.

Whilst it can be hard to break habits and make changes you must make the decision to take control of your lifestyle. The alternative is to be controlled by impulses and this means life long financial difficulties.

Once you have removed everything which you can live without go through your overview and consider how to downsize your essential expenses. Examples of essential expenses are rent, bills and non luxury grocery shopping.

You can downsize rent and bills by finding a smaller living space or sharing the space you already occupy. You can make a strict, basic meal plan and shop around for bargains to make your grocery bill as small as possible.

Another way you can manage and improve your monthly finances is to earn

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