Establishing a debt management plan is the first step to getting out of debt. Here’s what your plan needs to include:

Make a List
Painful as it may be, you need to start by listing all of your debt on a single piece of paper. You should list the person or company the money is owed to, the amount that is owed, your monthly minimum payment and the interest rate that applies to the debt. Be sure to include any and all debt. This includes, but is not limited to, credit cards, student loans, personal loans, car loans, mortgages, second mortgages, loans from family and friends and medical bills.

Assess the Situation
Once you have everything listed, you can begin to assess the situation. First, add up your total debt load and your monthly minimums.

After you’ve computed these figures, you may find it beneficial to write your list out again, starting with the smallest balances and

Take a Financial Inventory
The next step is to determine your overall financial health. This includes recording your monthly income and your monthly financial obligations (debt repayment, utilities, food, gas, entertainment, etc.).

Also record the amount of money you have left at the end of the month and the balances of all of your accounts.

The Whole Picture
Now that you have a complete picture of your finances, you can begin to form a plan to pay off your debt.

The first step is to decide which debt to tackle first. There are two common approaches to consider: You could either start by repaying the smallest balance and working up or start by tackling the highest-interest debt first. Both approaches are effective; it’s just a matter of determining which approach works best for you.

The second step is to determine how much you can afford to apply to debt repayment each month. Obviously you’ll need to make the minimum payments for each debt, so start with this figure. Then add to that the amount the additional money that you plan to put towards paying off your first debt. You should choose this figure based on what your financial

Put the Plan Into Action
The final step is to put your plan into action. Start making your additional payments to your chosen debt, and continue to do so until the debt has been paid in full. Then turn your attention to the next debt on the list. Before long you’ll be debt free and fully in charge of your finances.

Keep Your Motivation
To realize a debt-free lifestyle, you’ll need to stay motivated. Be sure to review your progress regularly, and don’t be afraid to offer yourself a few rewards along the way. If you want to succeed, you’ve got to find ways to make debt repayment fun.

Of course, the best debt management tips are never to incur any debt.
Shakespeare said, Neither a borrower nor a lender be,but then, William didnt live in this plastic millennium. Today, few of us have ready cash available to buy a house, a car, appliances, a new computer, or any of the items that are an integral part of our lives. So, we become borrowers through bank loans, student loans, finance companies, and credit cards. Then we face the problem of personal debt management.
Know before you owe
Modern debt management is more than just paying your debts. Personal debt management is walking the fine line that ensures you have credit available the next time you need it! In fact, the best tip to manage debt is to begin debt management before you become a borrower.
1. Track your money. Know how much you have and how much income you can reasonably expect in the near future. Know what your monthly expenses are and what you have left to pay creditors.
2. Save before you borrow. The best time to charge is when you really could pay cash. Although thats not always possible, it is possible to build a money reserve that can cover several monthsexpenses if you run into financial problems.
3. Investigate before you borrow. Look at borrowing as buying money. Comparison shop to find the best money bargain available whether youre shopping for money through a bank, a finance company, or applying for a new credit card.
4. Beware of the large print! Nothing down, no-interest or low interest may look attractive but such offers frequently are filled with fees and penalties that can turn ugly if you get in a pinch. Always read the fine print!
5. Have a personal debt management plan in place to pay back before you borrow. The easiest way to lose control of your money is to let your lender make the decisions about your monthly payments. This is especially true for credit card debt.
◦ Keep records of credit card purchases, what you bought, the date of your purchase, and a plan to pay for the item(s).
◦ Although you are required to make a monthly minimum payment, set a goal for paying major credit card debts (i.e. appliances) within a specific time frame like three to six months.
◦ Pay up small credit card purchases monthly. Sale items are no longer bargains when interest accrues to the sale price.
◦ Tack on interest charges and credit card fees in addition to your principal payment. For example: Youve budgeted $100.00 a month in payment for a new TV. The interest and fees on your credit card statement total $24.19. Your total payment = $124.19. That way you wont be paying interest on accrued interest.
7. Prioritize your debts.
8. Know your rights as a debtor. If you live in the US, the Federal Trade Commission (FTC) is an excellent resource both to help you manage your debts and provide you with valuable information should your debt spin out of control.
9. Check with the experts. The Internet, television, and print media are full of debt management tips and expert advice about managing debt, and acquiring wealth. Magazines like Smart Moneyarent just for the rich; theyre for those who want to learn to make smart money decisions. A couple of books worth browsing (and buying) are Slash Your Debtby Gerri Detweiler and How to Get Out of Debt, Stay Out of Debt, and Live Prosperouslyby Jerrold Mundis. However do be cautious when taking the advice of others:
◦ Just because someone has written a book, an article, or has a debt-related web site doesnt mean they are an expert on personal debt management. Do comparison shopfor debt management advice with the same care you shop for money to borrow. Find several opinions that match up with the opinions of others.
◦ Debt management advice isnt written in stone. Modify personal debt management tips and advice to work with your budget and your situation.

I would gladly pay you Tuesday for a hamburger today.
Remember Wimpy from the old Popeye cartoons? Even if youve never seen the cartoons, that phrase probably has a familiar ring to it. The charge it and owe itcycle can take a vicious backwards spin until your cash only goes towards paying for yesterdays groceries. However, you dont have to be Wimpy to manage your finances. Following a few practical debt management tips will help you always to have cash available for your burgers!