Got Debt? How to Regain Control of Your Finances

Debt. Who doesn't have debt? Barely anyone I know! However, debt can be controllable, or it can be over-whelming. Which category of debt are you in? If you're ready to take charge of your debt and get in control of your finances, here's how to do it.

Add Up Your Total Debt - Yes, put it all on paper and figure out exactly how much you owe. Ignorance may be bliss, but knowledge is power. The first step to debt freedom is knowing how much you owe and who you owe it to. Don't leave anything out, and more importantly, don't freak out when you see the bottom line!

Stop Spending - In case that was difficult to understand, let me put it another way - Stop Spending Money! Take the time to figure out exactly where your money is going and cut out what is not necessary. Many will be almost shocked to see where their money is going. The good news is that by simply finding out where you spend, you have also found places to cut back.

Repay Your Debt - This is the hard one, but you need a plan of repayment for the debt you have. More importantly, don't take on more debt during this time. Your primary goal now is to pay off the debt you currently owe to others. Contact your creditors to see if you can work out a lower interest rate or a more suitable payment plan, but get that debt paid off. Remember, this will not happen over-night, but as each outstanding debt gets paid off, you will feel financially lighter!

Create a Monthly Plan and Budget - A healthy financial budget will have you spending no more than 35 percent on a mortgage (or rent), 15 percent on vehicles and gas (don't forget insurance), 10 percent to savings, 15 percent to paying off debt, and 25 percent on your future. Figure out what you bring in each month then distribute your funds to each category. Stick to your budget.