First, assume that you’re going to fund all your essential bills to make sure your dry, warm, and fed. That’s a given, so don’t sweat it. Second, look at your secondary bills and find out which ones you can cut out. Cable, satellite, high speed internet, and cell phones come to mind. Car payments are another biggie. If you’re making payments on a car, plan on selling it as soon as possible and buying a $500 beater to get you back and forth to work. If you can take a bus or ride with a friend, so much the better. The more money you have to put towards beating back your problems with a debit consolidation loan, the better.

Now look at your credit card payments and figure out which ones you won’t be able to pay by going down the list and adding up the minimum monthly payments. Remember, this is all without the extra money you should free up by getting rid of some of your secondary expenses and/or selling your car. When you reach the last account you can make payments on, set aside some time to call the remaining companies and tell them about your situation. The only thing they need to know is that you owe more money on multiple credit cards than you can afford to pay, and the company to give you the best deal will get what’s left. The others will likely not get anything for quite some time. They’ll work with you, trust me.

Finally, take any money that you can free up from your secondary expenses and apply it to the smallest credit card balance until it’s paid off. Then attack the next one, and the next. Before you know it, you’ll be applying a substantial amount of money to the bigger balances and be beating them. This strategy, combined with a debit consolidation loan, will get you on the right track.

Make sure you group any other bills that are essential to food and shelter in the essential column, and then start looking at your secondary expenses. Gas for your car falls under this. The car payment, unfortunately, does not. Anything that you currently pay for internet, phone, cable, cell phones, and so on will go in this group as well. These are payments that you could potentially do away with if you needed to, some more easily than others. Obviously not buying gas anymore could prove to be an issue, but we’ll deal with that if we need to.

Finally, your credit cards and other debits. List them out with their interest rates and minimum monthly payment, from smallest to largest. Now add up all the expenditures that you must make every month to stay afloat and see if you get that much in from you job or jobs. Hopefully, you make more than you spend. Hopefully you make enough more to put some decent money towards your debits and get them paid off. I’m guessing, though, that you don’t. So now we need to get down to the difficult part: cutting back and getting a debit consolidation loan.

Now that the switch is flipped and you’re no longer buying everything you see, you need to take a deep breath, sit down, and take stock of everything that you owe, what your minimum monthly payments are, and what your monthly bills add up to. This is important, because it gives you the minimum amount of income that you need to meet your minimum monthly payments and your essential services like utilities, rent, gas, and so on. It will also eventually tell you the size of the debit consolidation loan that you need. Some things, though, are not all that easy to budget for. Your utility bill fan fluctuate drastically from season to season, with your electric bill going down and you gas bill going up in the winter.

All I can say is, you need to take your best guess at it. Obviously budgeting for gas isn’t an exact science, as gas prices fluctuate wildly as can the number of miles that you drive in a week. But, if you really hold your feet to the fire, look at your past payments, and figure out a good average, you’ll be in good shape. Obviously your gas budget will tell you whether or not you can take a road trip down the coast or not this weekend and big things like that, but there needs to be some flexibility to meet higher than expected demand in different areas.

The right mindset for a debit consolidation loan starts with deciding once and for all that you’re going to live within your means. And that must translate into a willingness to do whatever it takes to get there, including selling your house, your cars, canceling your $100 a month cable package, high speed internet, and never eating out again. Sadly, these changes are shocking and unthinkable to many people, and they’re not willing to commit. Most of the time it’s out of fear of the unknown or a fear of change. There’s nothing wrong with being afraid, but remember, there are billions of people all over the world that live with much less than you do, and chances are they’re happier.

Think about a life with basic cable and dial up internet. Now imagine it without the gnawing feeling that you have in your stomach when you think about paying your next bill, or where your next mortgage payment is going to come from, or how much time you have left on that no interest for 12 months deal you bought a TV with that you couldn’t afford. The bottom line is that if you don’t have to constantly worry about money, you will be much, much happier. You’ll sleep better at night, and you’ll be able to afford debit consolidation. You won’t worry about keeping up with your friends or neighbors, because you’ll know that they wake up every day wondering the same things that you used to, and it tears them up.

This couldn’t be further from the truth.  As a matter of fact, in many instances people who are not ready to drastically change their lifestyle come out in worse condition that when they entered the program.  Think about getting a big loan that pays off all the rest of your debit, then racking up the same amount of debit 9 months later.  Now you’re in the same position you were a year ago, except you have another big payment on a consolidation loan that you never should have gotten in the first place.

What I usually do is ask people to come into my office and sit down for a financial planning session.  Nothing formal, just a chat to find out what their situation is, and see if they’re a good candidate for a debit consolidation loan.  Things I’m looking for are a willingness to change, attachment to expensive personal property, lifestyle, and circumstances that lead to the debit problems in the first place.

People who have jumped from credit card to credit card, wracking up debit and moving on to the next one when the previous one is maxed out are not good candidates unless they’ve already shown actual progress towards changing their lifestyle.  That means living on a budget, cutting up their cards, selling expensive assets and so on.  If people haven’t already show this willingness, they’re more likely to just treat the consolidation loan as another source of credit and fail to pay that off as well.  The money that they save in monthly payments will just be transferred to another maxed out credit card’s minimum monthly payment, and the cycle will continue.