Is debt overwhelming your finances? If you have nightmarish visions of being surrounded by creditors, it's time to put down all credit cards, tighten the proverbial belt and start living not only within your means, but under them until you've paid back what you owe.
Take control of your debt and commit to the following strategies so you can start using credit to get ahead, rather than always playing catch-up.
Seize control of your debt by following these steps.
1. Know where you stand
Ignorance may be bliss, but it won't solve your problems. The only way to get out of a debt predicament is to know how beholden you are to creditors.
Where are you starting from? Look honestly, as painful as it may be, at how much you currently owe.
It's stunning how many people are afraid to take this step, says Michael McAuliffe, president of Family Credit Counseling Service.
"The majority of people I speak with, when we sit down and add up their debt, have no idea how much they owe," he says. "I have people say, 'No that can't be right, add it up again.'
"It's no mistake, it's how much you owe, and they're absolutely shocked."
Once you've tallied your debt, add up your income and subtract fixed expenses. The amount leftover is money for discretionary spending and paying down debt.
Now that you know where you are, stop. Stop using your credit cards. End the debt cycle so that every move from now on carries you forward.
"Decide to live off what you make, only have a debit card," says McAuliffe. "That is where we see the biggest resistance from people -- even people who are past-due on half their credit cards.
"The real key is not to rely on credit cards again, because if you're mismanaging credit, you have to look at it as an addiction. Because that's really what it is."