Having too much debt seems to be a problem that a lot of people today are facing. Debt can be crippling as the deeper you get into it, the harder it is to get out. The problem is heightened by the fact that having a lot of debt, especially unsecured debt like credit card debt, is more expensive if you have a poor credit score.

If your debt situation is particularly severe, you may be asking yourself how you can improve your situation. The first thing to do to get rid of debt is to admit that you are facing a serious problem that needs your full commitment in order to resolve it.

Here are steps you can take to work towards being debt-free:

Determine How Much Debt You Have

First determine the nature of the problem and how bad it really is. In other words, you need to take careful account of your debt situation. When in debt, especially if you have multiple sources of debt, it can be tempting to avoid facing the truth about how much you really owe altogether. So, sit down with a piece of paper or a computer spreadsheet and simply add up all of your debt. The number you come up with is what you will target to become “zero” in the future. Imagine the relief you will feel when that happens!

Organize Your Debt

As you add it up, put each type of debt into its own category. The reason for this is that different types of debt should be treated differently. Examples of relevant categories include credit card debt, retail store card debt, mortgage, second mortgage, auto loans, and equity lines of credit. Also, if you have multiple credit cards, for example, be sure to list each one separately.

Arrange According to Interest Rate

Now, next to each debt you have, write down the amount you owe and the interest rate for each one. Most likely, your credit cards will carry the highest interest rates. Then rearrange your list in order of highest to the lowest interest rate.

Pay Off One by One

Put together a plan to pay off each of your cards, one at a time. Each month, start by making the minimum payment on each of your cards, except for the highest-interest card. For that one, pay it down as much as possible each month. As you successfully pay down each card, you will get a feeling of accomplishment that will encourage you to keep fighting your debt monster until it is completely dead. By paying off the highest interest cards first, you will be freeing up more money each month to pay down your remaining debt faster.

Monitor Your Credit Score

One of the smartest ways to get rid of debt that many people overlook is to take the steps necessary to improve your credit score. You could potentially save a lot of money each year in interest payments simply by improving your credit score. This is because a better score will mean you will be eligible for lower interest rates, and it is the high interest rates associated with debt that keeps people in debt longer.

Change Your Spending Habits

If you are an individual who wants to achieve a debt-free lifestyle then you shouldn’t spend more than you earn each month. You should use a credit card and think of it as a useful tool to help you pay for things that you can pay off at the end of the month, but not consider it as an extension to the amount of money that you have to spend.

Debt Counseling

This involves working with a professional debt advisor. These experts can show you various methods and possible means you can take to become debt free. An advisor can guide you while lending their knowledge of each step of the process. Find the best debt relief solution for you here!