by Barbara Guess

Created on: May 29, 2010

The first major issue is to accept that you have a money problem, whether from a change in circumstances or from a misguided approach to the use of credit and store cards. Stop using these cards immediately and cut them up, to stop any temptation. The next step is to find out exactly the financial position that you are in. This can be quite a daunting task but is essential to getting yourself back out of debt.

1.Draw up a chart on paper, or use a computer spreadsheet. The column headings will be Name of Loan Company and Address, Monthly Payment, Interest Rate, Loan Period, Final Payment Date and Total to Pay.

2 List all loans that you have. Locate original documents and complete the chart with the correct information. Don't forget to include the mortgage on your home, if you have one.

3. Next take the most recent credit card bills and store card bills and fill in the relevant information on the chart.

4. Now you need to draw up another two column chart, again either on paper or computer. This is going to be a list of all of your monthly expenses. Nothing is to be omitted. List how much you spend on accommodation, services (water, electric, gas), community charges, food, television, phone, Internet, newspapers, magazines, club memberships, sports, school fees, bus fares, petrol, car tax, insurance, pet supplies, sweets, trips to the cinema, dinner out, everything.

5.Now you should have a complete list of outgoings. The next step is to list all of your income; salary, investment interest, child benefit, pension.

6. The point of reckoning, where you can identify whether your income is sufficient to support your lifestyle. If not you now hold a list of your present outgoings and need to modify your life style to meet your monetary commitments, or find an additional source of income. Remember the importance of making your mortgage payments as your home could be lost if you fall behind. It is always worth contacting your mortgage provider to keep them informed of your situation as they maybe have schemes to help short term cash flow problems.

Debt does not disappear on its own. If your problem is very complex and you lack the required motivation to act, then seek assistance. The Citizens Advice in England is a voluntary organisation that can help people identify and control debt problems. They can help by contacting your loan providers and arranging more favourable terms. They can also clarify the outcome of non-payment and the extreme measure of bankruptcy.

Learn more about this author, Barbara Guess.
Click here to send this author comments or questions.