Did you know Benjamin Franklin said "We don't plan to fail, we fail to plan" Spending some time on debt reduction planning could really increase your chances of success.

If you know your finances are a mess and you're struggling with a mountain of debt, then you need to create a plan of attack to help you get rid of your debt properly. This means reducing your balances and working on your spending habits at the same time so you don't end up back in the same situation in future.

Step 1: Evaluate Write a list of your current consumer debts. If you have credit cards, store cards, payday loans, car loans, personal loans or other consumer debts, include them here. Bigger debts like mortgages or student loans generally have lower interest rates, so for your debt reduction planning, you will be working on those debts with higher interest charges.

Include the names of your creditors, how much interest you're being charged, your total balance and your monthly repayments.

Step 2: Budget When you have a list of your total monthly repayments, write down how much income you have coming into the house each month after taxes. Then write down all your living expenses. It's easy to remember the bigger expenses, like rent or mortgage payments, groceries, fuel, child care, utilities, insurances and any other living expenses you have.

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Deduct the total amount of your living expenses from your after tax income. This figure is the amount you have left over to put towards debt reduction. From this amount deduct the figure you worked out in step one for your total monthly repayments.

Many people get a surprise at this stage to see that they spend more than they earn each month. If you have a negative amount after you've worked out your figures, then you?re in serious need of a debt reduction plan.

Step 3: Create Your Debt Reduction Plan When it's time to create your debt reduction plan, begin by circling the debt with the highest interest charge. This debt is costing you the most money, so it makes sense to get rid of this one first. Work down your list of debts from most expensive to least expensive. This is the order you'll be working on repaying them.

Change all your other repayments down to the bare minimum amount due on your list and put any extra money from these towards the most expensive debt first. Any extra money you have, either from bonuses or pay rises or even just if you hold a yard sale, put it towards paying off your debt.

Step 4: Negotiate Take a careful look at the amount you're being charged in interest. It's outrageous! Call your creditors and ask if they're willing to negotiate for a better rate or if they have an alternative product to offer you that is cheaper. If the representative is unhelpful, immediately ask to speak to the customer retention department. Lenders are more willing to negotiate if they think they'll lose a customer.

Reducing how much you pay in interest can often reduce your monthly payments as well, which gives you more money to put towards debt reduction.

Step 5: Follow Your Plan Once you have your debt reduction plan in place, do your best to follow through with it. Update the list you made as each of your balances begin to drop and don't give up on your efforts. Be patient and work through your plan until you succeed.

http://www.SpeedyResults4u2.com/?rd=yc5fQZR9Charity Manigault is the Owner of http://SpeedyResults4u2.com. Check us out anytime for marketing tips and a free subscription to our cutting edge newsletter.

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