"CCCS offers these tips to help consumers get started on a strategy to reduce and eliminate debt:
Balance your checkbook each time you receive a paycheck to ensure that you are not spending more than the amount you make.
Keep track of your bills. Designate a filing cabinet or secured box for bills and financial statements. Make separate files for bank statements, tax documents, credit card bills, medical receipts, mortgage statements and other records. Keep up with due dates.
Create a monthly budget. Your budget is your spending plan. To create a budget plan, determine your monthly income and recurring expenses like rent or mortgage payments, utility bills, food, transportation costs, tuition, savings, entertainment and personal grooming. Then identify other recurring and periodic expenses like clothing, appliances and maintenance, gifts, insurance and vacations.
Prioritize your expenses and spending. After writing down your expenses, prioritize them based on your "needs versus wants." Set spending limits and estimate costs for each expense. If any funds are left over after monthly expenses are paid, split them between debt reduction and savings. Pay down high-interest credit card bills and loans. Use extra funds to increase your savings and look for ways to reduce daily spending. Bringing your lunch instead of eating out and skipping that morning coffee and muffin can add up to hundreds of dollars in savings each month.
Develop a diversified savings plan. Savings should not be limited to retirement planning. It’s important to save for a down payment on a home or vehicle or for uncovered medical expenses. Make regular deposits in an interest-bearing account. Take advantage of employer-sponsored benefits, such as retirement and flexible spending accounts.
Recognize the early warning signs of debt trouble. You may be approaching a debt crisis if: you’re behind on the mortgage or rent and utilities, you’re using credit to buy items you should be able to buy with cash, you’re skipping some payments to make others, you’re getting notices or calls from bill collectors, or if more than 25 percent of your take-home pay is going to credit card debt."