When you have a lot of debt, you’ll find the weight on your shoulders becomes enormous. You will wonder how you will ever dig out of the hole you’ve created for yourself. The time has come to take the reins of your life and guide it onto a new path which ends with financial freedom. This article will show you the ropes.

Know exactly how much you owe, to who, when it is due, what interest rate they are charging you and how much you are currently paying towards it. Get a copy of your credit report and keep all of the bills sent to you each month.

This will allow you to create a spreadsheet of all your debts so you can easily visualize where you stand. If you aren’t sure of any information, such as how much your interest rates are, contact the creditor to find out more. If you have been avoiding their calls, be extra polite when you get in touch.

Speaking of getting in touch with your creditors, while you’re on the phone, ask them if there is any way you can reduce your interest rate. In the case of credit cards, they will often lower it in exchange for suspending your account so you can’t use the card anymore.

Other companies may reduce the total you owe, just so that you can pay them back in full more easily. There is no harm in asking for some help, and you never know what they might offer you, so give it a try!

Now that you know what you owe, you need to know how you will pay it off. Hang on to your receipts for a month and then turn them into a budget. Categorize like expenses, such as groceries or drug store purchases.

Next, remove anything which you really don’t need, like fancy coffee at Starbucks every morning or going out to dinner every Friday night. You will be amazed how much money you can save just by cutting out extraneous expenses, shopping sales and using coupons. That extra money can go towards your debts, leaving you financially free in a short amount of time.

Now that you know you’ll have some extra cash at the end of the month, you shouldn’t necessarily put it all towards your debt. What happens if you are in a car accident and you end up hurt? If you can’t work, your income will suffer.

If you have to pay your own medical bills or a deductible, you may have to put it on even more credit, leaving you in debt. Putting away half of the extra money you have into a high interest savings account will ensure that you have some spare cash for when the worst occurs. This will keep you from developing even more debt, and that can allow you to get all of your financial ducks in a row. Be sure not to spend that savings on something you don’t really need, like a new car or a vacation.

This isn’t a complex article which tells you about the intricacies of debt. Instead, the tips have been presented to you in an easy to read manner you can follow along with. Start using them and then enjoy the benefits they bring.