If you are just like many other people and find yourself trapped in a debt crisis, then you are at the ideal place. All is not lost! Instead, there are different ways in which you can turn the situation around. My main purpose is to give you some insight into the crucial things that you should do and the options that you have. There is a number of strategies to tackle the situation very easily and here I am going to describe the strategy that you need to follow.

1. Make a Budget. Making a proper budget is the most important thing that you should do. Do you know what the purpose of making a budget is? A budget will help you to track the incoming and outgoing money. A well-developed budget always helps people make a plan to live below their means instead of living beyond it. Yes, it helps to change the entire mindset about money so that people can save more money and the more money you will save the sooner you will be able to pay off the debt completely. Budget-making is the most important debt consolidation strategy that you can implement.

2. Sell some assets in order to pay your debts. I am sure that you know about E Bay. Do you know how much money E Bay makes each year? Billions! If you have an excess amount of assets then you could easily sell some of them to get those debts under control.

3. Pay more on debts on a monthly basis. If you pay more than the minimum amount then you will be able to get rid of all the debts sooner and easily. Try to do the same thing with all of your debts that you can afford. It would be better if you do this than with a loan with a higher interest rate.

4. Restructure your mortgage payment. If you want to reduce the mortgage loan payment amount in a significant way then you should implement a bi-weekly mortgage system. It will help you to reduce the rate of interest significantly. It will surely help you to pay off the loan amount completely.

5. Refinancing. If you have your own house and want to obtain a lower interest rate then a refinance could be the best option. But if you are unable to get a lower interest rate for your mortgage loan or there will be a penalty then you can go for an equity loan or line of credit.

6. A loan secured by other personal property. If you have an expensive car or boat then you can easily get a loan against that and you can use the same loan amount to pay off other debts.

7. An unsecured loan. Unsecured loans are the only option if you do not have any other loan options.

How to be a good debt manager

There’s nothing more we want than to be able to efficiently manage our cash. After all, the cash that we wish to manage is cash that's frequently, hard-earned. This is where a budget comes in. A budget executed the right way, ought to help you see where your cash is going, get more utility out of every dollar, and help you save some extra for future use.

The 1st smart secret to a budget is to set a goal. What do you wish to accomplish? Do you want to correctly appropriate your revenue into bill payments? Do you wish to put an amount aside for a huge purchase or a large investment? By having a goal, you'll be able to shape your budget to best serve your interests. Secondly, you'd want to take note of where your cash commonly goes.

This includes bills, major but regular purchases (like market costs, healthcare costs, and the like), and daily miscellaneous purchases. Only when you list where you know your cash commonly goes will you be able to distinguish which expenses you may do without. Once you’ve identified these regular expenditures, take into consideration what you may cut down on. How much do you spend on your everyday caffeine fix in the morning?

How much do you spend on paper deliveries to your front door? The paltry $2 or $5 of these little purchases cumulatively translates to more than $3600 a year! Rather than buying your expensive latte or reading the paper in print, put aside the amount you'd commonly pay for these little routine purchases in a little container. You'll be surprised at how much you’re saving out of your old budget.

Being indebted is a vicious cycle on its own. You’re talking about continuous payments, let alone large interest rates. The best way to deal with this is to pay the lower limit on all of your debts in order to avoid paying extraneous late fees. Whatever money excesses you may have, you may opt to add on to the payments you make in your greatest debt.

This way, you're centered on getting the greatest debts first that cost you the greatest interest rates. Doing this more and more, you’ll be amazed at how much you’ll take off your large debts. The last and most crucial step is to jot down the amount you earn and the sum you spend. You may make use of computer cash management programs, or make database sheets of your own. Make a system that works for you and will help you keep track of your monthly budgeting progression.

Excerpted from the book Debt Consolidation Strategies.

This excerpt has been edited and condensed for clarity.

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