Overwhelming debt can lead to financial struggles, but having a plan to reduce debt will help.

First – stop using your credit cards and do not take out any additional lines of credit or loans until your debt and finances are under control.

Second – call the credit card companies and ask for a lower interest rate. If granted, the lower interest rate will apply to new purchases.

Third – create a monthly budget and figure out how much money you can afford to spend on your debt.

Fourth – determine which credit cards and/or loans have the highest interest rates.

Fifth – make the largest payment on the card with the highest interest rate; if multiple cards tie for the highest interest rate, focus on the card with the lowest balance.

Sixth – make only the minimum payments on all cards except the card with the highest interest rate; apply the entire remaining budgeted amount to the monthly payment for the card with the highest interest rate

Seventh – once the credit card with the highest interest and lowest balance is paid off, shred that card so that you do not rack up more debt. Apply the monthly payment for that card to the next credit card with the highest interest rate; again, if there is a tie, focus on the one with the lower balance.

Eighth – repeat step seven until you are debt free.

Notes:

- Your total monthly payment for your debt does not decrease. Once you pay off one debt, that debt’s monthly payment is added to the next debt on the list.

- You should, however, increase your monthly payment as your salary increases to ensure that you are debt free as quickly as possible.