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Do you lay awake at night wondering how you are going to manage to pay your bills this month? If so, you are not alone. Many people have high levels of debt and are just managing to pay their monthly expenses when they receive their paycheck each month. Although you know that you have fixed payments each month, such as the mortgage and car payments, you may also have other debts such as credit card payments that change from month to month, you need money for groceries and then there are the expenses of clothing operating a vehicle and leisure.

The first thing you should do is prepare a budget of the amount of money you have coming into the household and list of your expenses. You do have to make sure you include everything so that your list is a complete as possible. Don't forget to include such things as eating lunch in a restaurant or going out for dinner on a regular basis. By subtracting the expenses from the earnings, you will have a clear idea of how much leeway you have in the money you have left over.

Scrutinize the money you have going out each month to see where you can make cutbacks. This includes cutting back on such things as eating at restaurants; you can save money by taking a lunch to work with you, which could be something left over from your dinner the evening before. If you spend a lot of money in gas by driving to work each day and then have to pay for parking consider carpooling with your colleagues or taking the bus or train instead. If you live close to your workplace, you can also become more fit and healthy by walking to work when the weather is suitable.

Do you spend an amount of money each month in magazine subscriptions that you don't really need. You can cut back your expenses by canceling these. Many of the books and magazines you receive through subscriptions are also available at public libraries and it doesn't cost anything to have a library card. You will be amazed to find that even these small amounts do add up over the course of a year which when you eliminate them, gives you more money to put towards paying off your debt.

Now it's time to turn your attention to your debts. Look at the interest rate charged on each one and determine how much of your monthly payment actually goes to pay the interest. You can make a start in paying off these cards by making a higher payment each month. Even a small amount added to the payment will reduce the balance because everything you pay over the interest does go towards the unpaid balance. Start with the bill on which you owe the least amount. As you see the balance going down, it makes it easier to make the sacrifice of paying more each month. When you have this bill repaid in full, instead of using the money to go back to your old habits, you now have an extra amount of money to apply to the bill with the next highest balance. Since you will probably be making double the amount of the minimum payment each month, this bill will be paid off rather quickly.

If you have an overdraft on your checking account, try to clear it so that you do have money available if an emergency crops up. If you are always at the limit of the overdraft each month, even the smallest transaction will push it over the limit. This means that the bank may return your check leaving you with having to pay the amount immediately along with high fees. Even if the bank does allow the transaction to go through, there will be high fees added to your account, leaving you with less leverage in handling your money.

If you are unable to make even the smallest addition to your payments to start reducing your debt, you can benefit from a debt consolidation loan. If you own your home and have a considerable amount of equity built up, then you can also benefit from taking out a homeowner loan and using the money to pay off all your debts. The result of using one of these types of loans is that you combine all the payments into one monthly payment that is often considerably lower than the combined payments you are making at the present time. Then you do have money to work with for other things at the end of the month. You will also reduce the amount of interest you pay on the loan because banks charge a much lower interest rate than credit card and finance companies. Keep a close eye on your finances and take the necessary steps to reduce your debt and you will have a more positive outlook about everything.