Part One: Identify the problem / Stop the bleeding

 Is your debt taking over your life? Try asking yourself these questions: 

• You are always broke, living paycheck to paycheck
• You consolidate your debts only to keep using the old credit lines
• You carry a balances of more then 30 percent of your credit limits
• You only pay the minimums
• You use your credit to afford things like food
• You charge more then you make (If so, you need a budget(LINK))

Did you find yourself nodding your head yes as you read that list? If so then there is a good chance that your debt is getting out of control.

If so, don’t kick yourself too hard. According to MSN Money about 43% of American families spend more than they earn each year and the average household carries $8,000 in credit card debt.

Congratulations… you are average!

But lets be honest, in this case being average is scary.

Debt is a form of bondage and an addiction. You barrow money and then pay on it for years, paying far more then the original amount you borrowed. As the debt grows, the more you have too pay, and the less money you have to spend … and the more you have to charge to pay your living expenses.

The good news is there is a road to recovery and the first step is to come to the realization that you are in bondage and break the debt addiction.

 Stop adding more debt. Sounds obvious, but its true. Its hard to get out when the hole keeps getting dug deeper.

Stop using your credit cards. Its hard to get out of the habit of using credit when you have lived with it for so long. However the only way you will ever get out of debt is to remove the temptation to charge. Cut up your cards, put them in the freezer, stick them in a drawer. Just get them out of your wallet and out of sight. (Don’t close the accounts though, or you risk lowering your credit score. I am sure I will write more on this topic later, but for now see Kimberly Lankford’s article at Kiplinger).

Once you’ve done these steps and committed to getting out of debt, its time to move to the next step.