So you're in debt, welcome to the American dream or in some cases, nightmare. You, like so many other people, have a lot of bills on a limited income. It makes life tough, there's no denying that. The question is, are you really ready to do something about it? If you are, it doesn't matter how you got here, what matters is what you do from this moment on.

First things first, don't expect to change overnight. Have you ever tried a "fad" diet? Losing debt can be like losing weight. It isn't going to happen overnight. It's going to take hard work and discipline. I think you should let that word sink in a little bit. Discipline. Do you have it? Do you think you have it? Are you more disciplined now, than when you got into this debt? If not, now is the time to take charge.

Your first step of discipline is to live life normally. Don't change anything you are doing, just keep track of what you are spending, and where you are spending it. You will want to do this for at least two months, but three is better. Map every dollar you spend over this time. Yes it is painstaking and it will take the D word, but do you want to be free of this debt or struggle with it?

One of the best ways to do this is to use your debit or check card over the next few months and then print off your bank statements. A variety pack of highlighters is cheap, and very helpful when finding where your money goes. You can separate expenses however you like, but I found these to be the most useful:

  • Take out/Dine out
  • Supermarket/Store
  • Bills/necessary expense (utilities, loan, mortgage, and credit card payments, repair bills, fuel, insurance, etc.)
  • Unnecessary expense (mostly entertainment and recreation. Movies, memberships etc)

Now, this will give you a general idea of where your money is going. You might find that you are overspending in some areas. Believe me, $10 dollar fast food runs add up very fast. The important thing to know here is how much you are spending in each of these sections. Can you trim money away from fast food? Can you cut down on entertainment expenses? Chances are good that you can, and if you want to get out of the burden of debt, you should consider giving up a few extra luxuries for the time being.

Now it's time to set a new budget. Make a list of priorities, here is a sample list:

  1. Bills
  2. Necessary expenses
  3. Groceries & hygiene
  4. Entertainment
  5. Take out

You can organize your list however you like.

When budgeting, give yourself some wriggle room. If you have been spending $600 a month on takeout don't try to switch to $100 for next month. It will blow up in your face just like one of those fad diets. Change can be slow, it doesn't have to be like flipping a switch. Set a goal of where you want to be spending your money, and take steps towards getting there. Baby steps are OK!

If you're still having problems, set aside cash for the areas you need more discipline. When the cash runs out, that's it until next month.

If credit cards got you into this mess, DO NOT USE THEM.

Once your goals are set, and your budget is working you towards them, just start following your own guidelines. Put the money you save towards the lowest balance debt you have. For example:

  • Mortgage 100,000
  • Second mortgage 25,000
  • Credit card 1 10,000
  • Credit card 2 4,000
  • Credit card 3 1,200
  • Hospital bill 800

Yes you have to pay all your minimums every month, but aside from that, now that you have some extra money from your new budget, you can start paying off the hospital faster. When it's paid up, you wont have that minimum payment anymore, that's even more money to put toward your next bill!

In conclusion, if you want to get out of debt, you're the one that's going to have to make it happen. Don't count on the lottery, or government debt relief. The chances of that are slim to none. Instead, count on yourself to take control of this. Now it's time to stop reading about it, and get at it! You can do this!