Debt is difficult to deal with and can be embarrassing to talk about. However, the following tips will assist you in the process of digging out of your financial hole and rebuilding your credit.

1. How much do you owe?

This may seem like a simple question but you may be surprised to find out that many people do not know the answer. The first step toward getting out of debt is to be honest with yourself and know exactly how much you owe. Complete the following: 1) Collect your bills in one place. 2) List each bill from highest to lowest, including house and car payments. 3) Write the minimum payment due. 4) Write the monthly balance. 5) Write the due date for each bill.

2. What are you going to pay first?

Once you have the facts you should start with your highest balance/interest rate and then work down from there. Set an amount over your minimum amount due and pay as much as you can to knock down the total bill. It is also important that you STOP SPENDING! Before buying, ask yourself if the item/service is a "need" or a "want."

3. Cut down or eliminate credit cards.

Credit cards are not bad things. In fact, as we move into a digital age they are going to become more important. However, you should try and limit your credit cards to one or two, anything more than that is unnecessary. Also, look closely at store-sponsored credit cards, as they tend to have much higher interest rates.

4. Know the facts.

It is important to know how potential lenders or other business partners view your finances. Order a copy of your credit report and review it carefully. Make sure there are no problems and that everything is accurate. If you notice an error, contact the merchant and the reporting agency immediately. An annual review of your credit report will also alert you to identity theft and other harmful practices.

5. Make a plan.

The facts are in about your current financial situation. Now, it is important to change your ways so that you do not continue to get into more debt. Complete the following: 1) Make a budget and stick to it. 2) Organize your financial life and keep track of where every penny is being spent. There are a number of different software applications that you can use for your home computer. 3) Stick to using cash or paying with your debit card. By doing this, you will avoid racking up more debt on your credit cards.

That's it! It is never easy to make major lifestyle changes but by following this list you should be able to save yourself a host of problems later on in life. Remember, a little effort now can pay big dividends later on. For more financial tips visit us online at http://kansas.tomorrowsmoney.org.