The first thing you should do when you are up to the neck in debt, is stop denying that you are in financial trouble. The next would be stop blaming somebody else for being in debt so deep. Many people would blame their credit card company or parents or wife or kids for bringing you into this financial situation. Instead of trying to put the blame on somebody else but yourself, you should use that energy to reduce and manage your debt.

1.) Prepare to fight the battle

Being in debt can be really stressful. There is a great chance that you need to tell somebody that you are in financial trouble. If you have nobody that you can trust or support you in your battle, you can always contact non-profit organizations that deals with debt reduction such as National Foundation for Credit Counseling. There is also and online forum for women who are racing against debt, where the members help and encourage each other in this battle. This forum is called Women in Red.

Having all the support you need, establishing a number of how much you owe is a very critical step in the battle against debt. By doing this you will understand accurately how big your problem is. Here is an excellent tool for you to calculate your debt.

2.) Do not look at budgeting as punishment.

A lot of people tend to avoid budgeting for some reason, as if it is such a punishment. The truth is, the best way to reduce debt is starting a budget and plan your spending. Your spending habit is most likely the reason why you are in this situation in the first place. The earlier you stop denying it, the better. Knowing exactly where your money goes will reveal to you how bad your spending habit is.

The most important thing about budgeting your way out of debt is that you need to budget more than the minimum on your credit card. Also, you need to put aside a little bit of money for emergency fund. Although you only save a little every week or every month, this emergency fund will prevent you from going deeper into debt, should any unexpected costs emerge.

3.) Avoid borrowing from Peter to pay Paul

Although contacting a debt consolidation company may be a good option for some, unless you have the discipline not using your credit card anymore and not opening a new account again, consolidating your loan can become your worst nightmare.

Even if you think you want to consolidate your loan other than using a debt consolidation company, consider these points:

• If you borrow from your 401k plan to consolidate your debt now, the closer you get to retirement, the more likely you will regret it.
• If you use home-equity loans to consolidate your debt, you may lose your house when you run up your credit card balance again.
• If you transfer your balance to a new low interest credit card, you may get deeper into trouble if you don’t destroy your old cards but keep using them.

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