If you’ve found yourself in debt, there are a number of things you should start doing right away to take back control of your finances:

Don’t panic. No matter how deep in debt you may be, you must not panick, no matter how overwhelming it may seem. I have seen people $100 000 in debt get out of it. It takes time, but it is possible to get out of even the worst of debts. If you panick, thinking it’s impossible, you’ll only lose focus and you will have more difficulty in making those decisions which are absolutely crucial to getting out of debt.

Budget. This is one of the most basic steps to getting out of debt. Read the budgeting basics article here at The Penny Mine to get a solid overview of how exactly to create a budget to suit your lifestyle and which will help you get out of debt.

Get a Second Job. While this isn’t always an option for everybody, if you’ve got the time, a nights/weekend part-time job can help you cut into your debt very quickly. If you’re working for $10 an hour, even an extra 15 hours a week should net you around $400 per month after all of the deductions. For most people in debt, this can make an enormous difference.

Do Not Open More Cards. A lot of people, tempted by low introductory rates, tend to open as many credit cards as they can to consolidate debt. I strongly recommend against this, unless you know exactly what you’re doing. The reasons behind this are covered in parts 1 and parts 2 of the 0% intro rate trap. For most people, these introductory cards are a sham, and will cost you more money than they are worth. Stay away, no matter how tempting it may be.

Prioritize Your Debt Reduction. If you’ve got student loans of $20 000 at 5% interest and credit card debt of $10 000 at 20% interest, you’re much better off paying the smaller amount of credit card debt first, despite it having a smaller balance overall. Some people suggest the “snowball” method, which involves paying the smallest debt first and the largest debt last, regardless of interest rate. If you have problems paying debt and need the visual of having your debts disappear, the snowball method may be better for you. However, if you have the willpower to stick to your plan, always pay off the highest interest rate balance first.

By following these five simple steps you’re putting yourself right on your way to a debt-free lifestyle. Of course there is a lot of planning and thought which must go into being debt free, but these are the basic steps you need to follow to get onto a debt-free path.

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