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While managing your debt can become a panic inducing matter, there are steps you can take to alleviate the strain.

1. Calm down.

Having debt is not a world ending state of being. That said, it's not a sign of healthy financial management either. Your objective when managing your debt is to bring your income and expenses into a 60/40 balance respectively.

2. Create a budget.

Knowing your complete financial picture is essential to managing your debt crisis. There are many budgeting templates available online for your use. You can find Microsoft's budget templates here:

http://office.microsoft.c om/en-us/templates/CT101172321 033.aspx

When budgeting, make sure you account for all the money that enters and leaves your hands. When entering your expenses, make sure you include some funds for entertainment, fun activities or other simple things you enjoy. Nothing will cause a budget to fail faster than to exclude rewards for yourself for sticking to your budget. Keep these items reasonable and increase them only after funds become available after you:

3. Pay Down Credit Balances.

Who knew such tiny pieces of plastic could be responsible for wreaking so much havoc? As with your overall financial picture, you need to know exactly where you stand with each account. A good way to track this is to use a Credit Card Payment Calculator such as the one here:

http://office.microsoft.c om/en-us/templates/TC300016541 033.aspx?pid=CT101444811033

Onc e you know how much you owe on each card, you can develop a plan to begin paying them off. When you're cash strapped, but determined to make a dent in the balance, start small. Pay your minimum payment plus 10%.

Some people say that you should pay off the card with the higher interest rate first. While this does make sound financial sense, to get started, you might choose to start with the one with the lower balance. The feeling of accomplishment when you can say, "One down," will encourage you to keep going on your debt management plan.

Paying down balances is not only for credit cards. It is crucial for mortgages. Did you know that once you've satisfied the interest requirement for the month, any additional money you send goes toward the principal balance? See if you can work a couple more dollars out of your budget to pay a little extra on your mortgage.

Using this method, you'll save money on interest and pay off your mortgage that much faster. Beware of early payoff penalties, though. If they exist, consider paying the mortgage down to $100 then

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