Write it all down.
This step is the most important, but also can be very overwhelming. It is important to write out the debts you owe so you can begin making a plan to pay them off. Write down how much money you owe, and to whom, and figure out what the grand total amounts are. You may want to order the debt by importance, by looking at interest rates being charged and how much they are past due. Once you have a clear picture of where you stand, you can begin the process of becoming debt-free.
Track your spending.
Make a spreadsheet and track what comes in and out of your bank account. This will give you a good idea of where your money is going every month, and where you need to improve. You will be surprised at how much simple purchases like coffee or fast food add up over four weeks. When you have identified your problem areas, you can make yourself an itemized budget - that will allow you to put more money towards your debt and in theory, this will also prevent you from overspending elsewhere.
Sacrifices will have to be made in order to get your finances under control. Try to remember that by foregoing a dinner and a movie, you are ensuring a stable and debt-free future for you and your family.
Pay it off.
You will not pay off your debt overnight. It is going to take patience and perverseness, and some days it may feel like an impossible task. This is when tracking your debt and budget really pays off. After a few months some of your smaller debts will begin to get paid off, and looking back you will be able to see the progress you have made on the larger ones. Use these victories as fuel to keep going until the end.
Do not create any additional debt!
Stop using the credit cards. Don't buy anything unless you can pay the entire amount in cash. If you are adding to the pile of debt you already owe, you will never find your way out. If you can't afford to pay for your vacation without putting it on credit, you can't afford to go on a vacation.
If your debt has become too much to handle, and a budget isn't cutting it, you should seek advice from a licensed credit counseling agency. Speaking with an expert will ensure that you have an opportunity to explore all your options.
Becoming debt-free will challenge you in ways you never expected. You will have many ups and downs along the way, but try to focus on your progress rather than how far you still have to go. The journey towards financial freedom can take years, but the prize at the end will be well worth the hardships to get there.