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People only realize it is too late when creditors start calling in the loans,”

When Ja’Net Adams graduated from college ten years ago, she was debt free. Then she married her high school sweetheart, who was deep in debt from school loans and in need of a new car. She and her husband found themselves staring at a total debt balance of $48,000. Then Adams lost her job.

“We were in deep trouble,” said Adams, now 32, who lives in Kernersville, North Carolina. “So we decided to make a change when it came to handling money.” Adams and her husband stopped eating out, started using coupons and worked extra jobs. Two and a half years later, they are debt free.

One-quarter of adults in the United States said they were worried about servicing their debt commitments, including credit cards, student loans, car payments, and medical debt, according to a 2013 Financial Literacy Survey by the National Foundation for Credit Counseling (NFCC) and the Network Branded Prepaid Card Association (NBPCA). In the US, the average adult with a credit card owes about $5,047 in credit card debt, according to CreditCards.com.

Americans aren’t alone in their debt woes. In the United Kingdom, it is not uncommon to find people with $20,000 to $40,000 in credit card debt, said Mike Thomas, founder of UK debt advice site DebtWizard.com.

“People only realize it is too late when creditors start calling in the loans,” said Justin Wyse, a wealth advisor with Wyse Wealth in Sydney, Australia.

If you are in over your head — or just owe more than you would like to — you can turn your financial ship around.

What it will take: That depends on what you owe — and probably where you live. Credit card debt is one big culprit.  In the UK, adults owe an average of £3,211 ($4,997) in consumer borrowing, such as credit cards and car loans, according to UK money education charity Credit Action. In Australia, the average debt per credit card holder is about AUD$4,757  ($4,282 US), according to the Australian Securities and Investments Commission.  In the US, there’s the added issue of college debt: more than two-thirds of US college students graduated with student loan debt this year, averaging more than $35,000 each, according to a study by Fidelity Investments.

Meanwhile, in France, Germany and China, consumers spend less than the equivalent of $300 a year on credit cards, according to CreditCards.com.  “I do not think consumer credit is as readily available here yet, keeping many from getting themselves into trouble,” said Tony Noto, a financial planner with Noto Financial Planning in Shanghai.

How long you need to prepare: As long as it takes to do a self-assessment and to get a handle on your cash flow. “Often people in financial difficulty will owe varying amounts to different creditors and will be unaware of the full extent of the problem,” said Edward Ware, a spokesman for UK debt charity StepChange.

“Get everything together so you know how much you owe and how much you need to pay each creditor per month,” Ware said.

Get a handle on your cash flow — assess what money comes in each month and where it is goes. Track every penny you spend for two months. Save all receipts and keep a log in a little notebook or on your smartphone every time you buy something in cash. By the end of the two months, you should have a good picture of your average expenditures — both necessary and not.

Do it now: Cut back. Are there any areas where you can trim expenses? Could you bring your lunch to work a few days a week instead of paying for takeout?

“Spending $25 to go out to dinner every Friday night costs you $1,300 a year,” said Catherine Wong Doo, a private wealth advisor for National Australia Bank in Sydney. The more money you can carve out for debt repayment, the less you will pay overall in interest.

Knock off your smaller debts. If you have any loans with balances of less than $1,000, pay them off first. “It does not make sense to have $20 a month going to something,” said Brian Frederick, a financial planner with Stillwater Financial Partners in Scottsdale, Arizona. “Just pay the whole thing off and be done with it.”

Seeing some debts disappear will also provide a psychological boost and add to your forward momentum.  

Consider consolidating. If the bulk of your debt is on high-interest credit cards and you have substantial equity in your home, you might consider taking out a lower-interest home equity loan to pay off your credit card debt while saving on interest.

However, if you have found yourself in credit card debt because of bad money habits, a home equity loan could make things worse, said Rod Mudgway, a financial advisor with Brackenridge Financial Solutions in Auckland, New Zealand.

“If those people refinanced and got the rate down, I could almost guarantee in a few short years they will have the original loan and another three credit cards maxed out,” he said. “The problem is the behavior, and that cannot be solved by consolidation. Those people are better off to pay the most expensive credit card off first, then the next, then the next.”

Do it later: Snowball your payments. When you pay off one debt, use the money you would have spent to make payments to put bigger chunks of cash to another debt. Paid off a car? Send the equivalent of your monthly payment to a credit card account or a student loan bill to pay down the balance faster. For best results, concentrate the bulk of your payments on one debt — the one that costs you the most in interest is a good choice — while you pay the minimums on the others.

Make extra money. If your debt is substantial and your current pay-down plan will take years, consider boosting your income.

“Is it possible to take on a second job, or some extra hours in your current role?” said Ware. “Could you sell some old clothes or household items on eBay?”

Do it for life: Switch to cash — or use it more often. If credit cards are your debt downfall, the answer may be to stop using them.

“When you use credit cards, the reality of the amount of money you are spending and how you are going to come up with that money is suppressed,” said Wong Doo. “When you pay with cash, it feels like you are spending ‘real’ money.”

Save, save, save. No matter what, set aside 10% of your income. “This automatically translates to always living within your means, in which case, debt should never become a problem again,” Noto said.

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