Debt is something most people face, and most people feel overwhelmed by. It seems like no matter how hard you try to manage your debt, new expenses and debts creep up, and you are barely hanging in there by the skin of your teeth. The key to debt management is having a budget so that you are consciously spending less then you are making, and having savings be a part of the budget so that when those unexpected expenses flare up, you can combat them without further indebting yourself. Of course, for many, they are past the point of a budget, and instead need to talk to their creditors in order to work out a debt repayment plan that is manageable and agreeable to both you and the creditor.

The idea of debt is simple, but not easy. Simply put, to get out of debt, spend less than you make. However, this takes discipline and know-how. Discipline is great, but you'll also need information if you plan to cut down on spending, and get yourself in a position to pay off debts. This information comes from a well planned, realistic budget.

The following are some of the keys to debt management without turning to DMP's created by credit and debt counseling organizations. We will get to that a little later:

First, Save!

If you want to spend less, you need to save more. People who find themselves in great debt, usually do not save money very well. So, start yourself out with a short-term savings goal. These are a great way to enforce spending discipline. Keep giving yourself the occasional treat, but get in the habit of planning for them. So, for example, if you want to buy a new television, instead of going out and putting the $1200 on your credit card, then paying it off, put the payment amount in the bank each month until you have enough, then buy it. Yes, you will have to wait and watch your old TV, but you also get the satisfaction of owning it outright, and not having to carry the debt. Savings goals are huge to managing debt.

Second, Change your mindset!

Like previously state, beating debt is simple, but not easy. One of the biggest challenges we face in managing our debts is changing our mindset about it. We all know debt is bad, but when we are driven by advertisers and our own need to prove something to "keep up" with our friends and neighbors, our knowledge of debt being bad goes out the window, and justification flies in. The fact is, every time we turn around we are confronted by the opportunity to get it now and worry about paying for it later. This is a very attractive offer. We work hard, and we want the rewards. However, until you get out of the buy it now and pay for it later mindset, you won't be able to manage your debt. The best way to change your mindset is to be happy where you are. If you do not feel a need for more, you won't spend money you don't have. Learn to value what you have, and work for what you want. Changing into this mode is not easy.but it is worth it.

Third, get motivated!

Waiting for things you want, saving money instead of spending it, and paying off your debts is no fun. Let's face it, developing a budget, saving money, and sending out debt payments make for a pretty dull life. This can lead to frustration and a big shopping spree, which means, further debt and further stress. So, a good way to make paying off your debts more exciting, is to add some motivation. Come up with a fun savings goal. Have a one year plan, and reward yourself with something really great at the end of that year if you meet your goals, pay your debts, and save like you are supposed to.

Take the time to sit down and think about what would really motivate you to get in control of your debts. Get everyone that spends your money involved. This means the spouse, kids, etc. Then, when money gets tight, no one will complain because they will all be focused on this great goal, or motivational tactic instead of the change in living style they are facing. For example, plan a great family vacation. Then, instead of eating out every week, put money into savings for this trip. It will get you into good habits, and will have a great, positive, ending. Just be sure to write it down! Post it where the whole family can see, and remind yourself of it when you face the temptation to spend money you do not have.

Fourth, Create a budget!

We have all tried this before, but how successful is it? Usually not very successful, in fact, most people fail. However, if you want to rise above the debt monster, and take control of your finances, you'll first need a different perspective and the motivation to act accordingly, but then you will also need a road map to tell you how. That roadmap is your budget. Create is to that when you spend money you know where it is coming from, and where it is supposed to be going. That way, you do not have the excuse of ignorance for justifying your debt. The next time you're about to spend money that you don't have on something that you don't really need, ask yourself two basic questions:

If I can't pay for it in full this month, what is going to change next month? Where will the extra income or reduced spending come from? Be specific.

What fun, motivational one-year savings goal am I working towards?

This is going to help you see what you would have to give up in order to get this. For example, say you want to go to a professional sports game, but it does not fit in this month's budget. What will change next month? Are you getting a bonus? A birthday check? Or what? If nothing is going to change, where will this extra money be taken from? Your grocery budget? Your fuel budget? Your mortgage? Now, you have a clear picture of what you are risking for the ability to watch the game in person instead of on television. Without a budget, this can't happen.

Get a good understanding of how much money is coming in every month and exactly where it's being spent. Create a detailed budget of how you intend to allocate the income you make, and familiarize yourself with it. Then, stick to it, stick to it, stick to it. It is so hard to do this, almost no one pulls it off, but, if you want to manage your debt, you have to go from putting it on paper, to putting into practice.

Five, Just breathe!

If debt troubles have pushed you as far as you can go, STOP... and take a deep breath. Money is stressful, and it can be hard to manage, but it is not the end of the world to be stretched so thin you can barely make ends meet. If you are in a position where you are literally choosing between bills and food, you need to take a breath, then pick up the phone. It's in everyone's best interest -- both yours and the people to whom you owe money -- to get you out of crisis mode, and work out a repayment plan. You can't do this by sitting at home crying about your financial situation. Instead, call your creditors (as embarrassing as this is), and explain your situation. Generally they will work with you. They do not want you to declare bankruptcy, and not repay them any more than you do. 

The laws are actually on your side, although you'll have to get organized to take advantage of them. If you are getting hassled by bill collectors, it is important that you know the laws. Start recording of every conversation you have, from here on out, with lenders, credit bureaus, bill collectors, etc., by phone or in person. By recording, we mean write it down, what time it took place, what was discussed, etc. Be aggressive about doing this, you want to get names, employee ID numbers, dates and key discussion topics, including any agreements reached or promises made. Write it down, write it down, write it down. Next, you want to save all related mail, including postmarked envelopes. If you are sending them something, including payments, make sure you get registered mail, or a certifies letter and request receipt so that you can prove it was received. You owe these people money, so it is important that you are courteous and in control of your emotions, but you also need to let them know that you are keeping record of what is going on, you know your rights and the laws, and you won't be intimidated by them.

So, if you are going to handle your debt management yourself, it is important that you do the following things:

Start by contacting the businesses to which you owe money. Do this as soon as you can. It sucks! No one likes doing it. But, most companies would rather work with you than bring in a costly bill collector. So, be honest with them, and tell them you need to work out some sort of repayment plan that you can handle. Do not promise anything you can't do.

Second, know your rights, debt collectors cannot contact you before 8 a.m. or after 9 p.m., and cannot otherwise harass you, your family or friends, or tell lies. This means they can't threaten you with jail time, or even say they are going to garnish your wages. Believe it or not, nobody can garnish your wages without a legal proceeding. So, if they claim they can, it is a lie.call them out on it.

Third, protect yourself from these debt collectors in places where they should not be bothering you, such as workplace calls or visits. You have to do this by asking that you not be called or visited there, and you need to do it in writing.

If this does not work, or you feel you are being harassed, then contact the Federal Trade Commission at 1-877-FTC-HELP, or online at http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm

If dealing with debt collectors on your own as a debt management strategy does not suit you, then consider a credit or debt counseling service. A good credit counseling service can turn your financial life around, but only if you are careful to pick someone legitimate.

These services will help you create a realistic budget, give you seminars on finances, will listen to your financial situation and help you come up with a plan to improve it. And, in many cases they will negotiate repayment plans that you can handle with your creditors.

Because many of these counseling services are non-profit organizations, you can often get these services for free, or a small fee. However, be careful to check for hidden fees. To find a good credit or debt counselor that can help you create a debt management plan, contact the  National Foundation for Credit Counseling (NFCC), at 800-388-2227 to find out if there is a center in your area.

If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan (DMP). A DMP is a program where you deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills, student loans, and medical bills, according to a payment schedule the counselor develops with you and your creditors. Your creditors may agree to lower your interest rates or waive certain fees if they know you are using this kind of plan. But remember they are not for everyone, so be careful when choosing this option.