Before It's Too Late!
Any financial process begins with necessary changes in financial behavior. The degree of change varies based on financial priorities, but, in the end, it's about adopting good habits and abandoning bad ones. Here are some ideas:
Start with nickels and dimes: You can't wish your way out of debt - it takes cash. And recovery literally can start with loose change. If you've never done a real budget, let's go. That means tracking every cent of your spending on paper or with software. Once you see what's left in your wallet for the last month, start cutting non-essential spending like ... that fancy coffe you love or eating out so often, and put that extra cash to the highest-rate, non-deductible debt you have. Seeing your spending clearly is your first step in changing your relationship with money right now.
Attack the highest-rate debt first: In most households, this means attack the credit card balances. You must begin by paying more each month than the minimum balance. Zero in on your highest-rate cards first, pay more than the minimum and then work downward.
Refinance if you can: Mortgage rates are currently at lower levels, but that won't last forever. You'll need at least 10% equity in your home and a credit card score exceeding at least 740 (out of 850) to qualify for the best rates, but negotiating with your current lender first is a great place to start. Be sure to inquire about the various government programs and how they pertain to your specific situation.
Make debt-fighting a family lesson: When you're talking to a family about budgeting and lowering expenses, you have to walk a fine line between discipline and fear. But setting money priorities is part of growing up, and it's essential to discuss and agree upon them as a family. Generally speaking, it helps to solicit and listen to the input from them so they feel involved in the decision making process.
Set some post-debt money goals: Getting out of debt means you'll be in for an extended period of frugality, and that might be a bit depressing. But as you battle your balances, make some time to really think about what you want to do with your life once the debt is gone. Having a debt-free lifestyle doesn't stop at having zero balances (though that might call for a celebration!). Being debt-free is the gateway to better money management that will help you reach your dreams and offer more freedom.
Go debit: Debit cards wearing a bankcard logo are typically welcome at most stores where credit cards are accepted. This way, you pay cash without carrying cash. If you don't have such a card, you can probably get one from your bank to replace your traditional ATM card, but remember to tell them to limit your buying power on the card to only what you have in your account. And use overdraft protection to avoid fees. A cash card like AMEX is the same idea, it forestalls the payment 30 days, no more.