Here is a simple, step-by-step plan to help you get out of debt yourself. You get the satisfaction of taking control of your debts and the freedom to start keeping more of the money you earn each month.

But best of all, this debt-reduction plan will only cost you about $5-$6 a day over what you're currently spending on your bills to help guide you from 'debt-consolidation' thinking to 'debt-free' thinking!

Steps to do-it-yourself debt relief:

Step 1 -- Analyze your current situation: earnings, bills, obligations, etc. It's important to know exactly how much you owe, how much you earn, and establish a plan to pay off debt. Determine the maximum you can apply to your bills. For instance, you commit $500 a month to clear your debts. If your budget is tight, you'll have to make some hard decisions on scaling back on daily expenses such as regular coffees vs. Starbucks lattes, brown bagging it at the office vs. $10-$15 lunches out, borrowing a book from the library vs. buying one at Barnes & Noble. Almost everyone can find that extra $5 a day to add the $150 extra it will take to eliminate those nagging bills.

Step 2 -- Now, total all credit cards and bills you want to eliminate. Look at the minimum payment due for each one, then add 20%. So if the minimum payment is $50, the monthly payment you'll make from now on will be $60. Total all these bills for Step #3....

Step 3 -- You've set aside $500 a month to clear these debts you've identified. The total from Step #2 is $350. Subtract this amount from the $500. You now have $150 extra money to pay down debt. This $150 will allow you to knock out debt fast.

Step 4 -- Keep paying all your bills on time with the additional 20% added to each. But, most importantly, apply the extra $150 toward the debt (credit card, personal loan, whatever) that is the largest total on your list, ON TOP OF your regular monthly payment. Not instead of, IN ADDITION TO your regular payment! This is important to eliminate this debt as quick as possible. Furthermore, put those credit cards away where you won't use them anymore while you're eliminating debt (some say to cut them up, but let's keep the credit cards in case you need them for an emergency).

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Step 5 -- When your largest debt has been paid off completely, apply its respective monthly payment and that extra $150 you've used to pay it down, and apply ALL OF THAT MONEY to the next-largest debt. Same thing: make the regular monthly payment, plus 20%, plus the monthly payment you were making on the paid-off credit card, PLUS the extra $150 you were using to pay it off, and pay this entire amount on that 2nd highest debt, until it is paid off too, and then repeat the process on the 3rd highest debt. This process may take months, perhaps years to complete, but it will start to accelerate once you've finally got a large portion of that $500 going to only a few monthly bills.

Step 6 -- I'd recommend analyzing your need for all those zero-balance credit cards, and close out the ones that have annual fees or that don't meet your future needs by calling the credit card companies and requesting that the account is closed by consumer (make sure they report it that way, it's important that it shows up this way on your credit report in the future so it won't affect your credit score negatively).

Conclusion: Don't miss an opportunity to make massive impacts on your debts by applying a large tax return or extra-large sales commission you weren't expecting to pay down on your bills. It may look like a good idea to "bank" the extra money, but when you're paying out 15-22% interest on your credit card balances and only getting 2-3% on savings account balances, it's clear that you can "earn more" by reducing debt than by setting aside that extra money.

Small debt reduction steps make a big impact. The sad truth is, however, I've noticed that people generally will piddle away any extra income they get throughout the year, and then they can't really say where it went and what they actually bought with it.

When you do finally pay down your debts yourself, the feeling of financial relief you'll feel once you've gotten control of your bills will make all this tedious effort very worthwhile. Share these debt reduction ideas and information you've found on FindHow2.com with your friends and family to help them restore good credit after they get out of debt .... they'll thank you for it!

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Special Report:

Eight Ways to Consolidate Debt
By Annette Leahy

Next to winning the lottery, a debt consolidation loan is a debtor’s dream. With one monthly payment and a fixed monthly payment schedule, you can actually see an end to those monthly payments.

In reality, consolidating bills isn’t always easy. If you have a lot of debt, it can be hard to find a consolidation loan at a lower interest rate. And if you’re not careful, you can end up deeper in debt than when you started.

Your goal in consolidating your debt should be to lower your overall costs. To accomplish this there are two things to keep in mind:

1. Get the lowest interest rate possible

2. Have a plan to pay off your debts in 3 – 5 years.

Here are some of the best ways to consolidate:

Using Credit Cards

The good news about this method is that with a good credit rating, you may get a much lower rate than other forms of consolidation loans. And since credit card issuers don’t require collateral, you aren’t “risking the farm.”

Call your current issuer to ask what interest rates they will offer you if you transfer balances from other cards over to theirs. Go for a fixed rate if you can get it, and ask them to waive any transfer fees. If you can’t negotiate a low rate with your current issuer, try shopping for a new card at a site such as CardRatings.com. But be careful! Too many applications for credit in a short period of time can hurt your credit rating.

Once you do consolidate this way, be sure to set up an optimal payment plan so you can be debt-free in 3 – 5 years.

Home Equity Loans

With a home equity loan, you borrow against the value of you home, minus any other mortgages. The two major kinds are:

1. A Home Equity Loan – a fixed amount of money for a fixed period of time (sometimes at a fixed rate) and

2. A “Home Equity Line of Credit” where you borrow up to a pre-approved credit limit (interest rates usually variable) and can borrow again if you still have money available.

These loans can offer attractive rates, low payments, and the interest is usually tax-deductible if you itemize.

Many issuers offer no or low closing costs for these loans. Interest rates are often variable, however, and there’s always the risk that you can lose your home if you can’t pay.

Cash Out Refinance

Refinancing your home and taking out money to pay off bills (called “cash-out refinance”) is yet another way to tap the equity in your home. If you can refinance at a substantially lower interest rate, you’ll eliminate the high interest costs of the debts you pay off, and you could even come out with a lower payment than you have right now since rates are so low.

One option to consider: an interest-only loan. By lowering your monthly payment, you can free up money to use toward paying down other high-rate debt or building a retirement fund.

Make sure you understand the total cost of refinancing. Take any money you’ve freed up by paying off other bills and use that to create an emergency savings fund.

Traditional Debt Consolidation Loans

A debt consolidation loan is an unsecured personal loan, and the only collateral you are offering for the lender’s security is you. Because lenders consider them risky loans, they’re usually more expensive and not always easy to get if you have a lot of debt.

If the interest rate is too high to make it worth it and the repayment term is ten or fifteen years, you should probably consider another method of consolidation. However, if the term and interest rate are right, this can be a great way to actually save money in the end. (Check Bankrate.com for current averages). Remember, to calculate the total cost of the loan from start to pay-off.

Credit Counseling

Credit counseling agencies may help you get out of debt, though they don’t actually consolidate your debt.

Instead, payment plans (usually with lower interest and fees) will be worked out for all of your eligible debts. You’ll make one monthly payment to the counseling agency, which will pay all your creditors.

Participating in a credit counseling program generally won’t hurt your credit rating, and if you stick to the plan you can be out of debt in three to six years. But be careful which agency you work with. If the counseling agency pays your bills late, you’ll pay the price since you’re still responsible to the lender. It happens.

Debt Settlement

Debt settlement is another option that’s become increasingly popular with consumers who have a lot of debt and can’t, or won’t, file bankruptcy. You stop paying your bills and instead make a regular monthly payment to the settlement company. Your creditors contact them, and not you, about your overdue bills. As your accounts fall further behind, the negotiation company will settle your balances – usually for 50% of the balance or less (including fees) depending on the debt. Most people can be out of debt in less than two years or less using these programs.

It’s not perfect. Your credit rating will be hurt in the short run and you must be certain you’re dealing with a reputable company or the money you pay each month could disappear. Still, for consumers who can’t shoulder the burden of debt they have now, it can be a very good option.

Retirement Loans

If you have a 401(k), 403(b) plan or certain types of pension plans, you can borrow against your nest egg. (You can’t borrow against your IRA.) It’s easy, with no income qualifications or credit check.

The key here is to borrow against your retirement account, rather than withdraw from it early so that you don’t end up paying taxes and a 10% penalty. Also, if you leave or lose your job, you may have to pay your loan back immediately or pay taxes and penalties for an early withdrawal.

These loans typically offer low interest rates, and interest is paid to you, since you are the lender. While tapping your next egg like this can short-change your retirement, so can costly debt payments. If you are in your 20’s and 30’s,you obviously have more time to rebuild a retirement nest egg, but even if you’re in your 40’s or 50’s, you will want to weigh the cost of paying the high interest of the debts over time, versus borrowing from your retirement account. The return you get from paying off high-rate debts is guaranteed – while the stock market isn’t.

Rapid Repayment

There is a mathematically optimal way to pay your debts. Choose a fixed level monthly payment, and commit to it each month. Pay as much as you can on the highest rate debt first, while payment the minimums on the rest.

I almost always suggest consumers with debt start by creating one of these plans. Many people who do so find they don’t even need to consolidate to get out of debt in the next few years. They just need a plan and they can do it on their own.

Overview

The biggest mistakes people make when it comes to consolidation are:

A. Not having a plan for paying the debt off after they’ve consolidated, and

B. Procrastination. Waiting for the “perfect” solution to come along almost always means you’ll end up deeper in debt. Choose your approach, and start getting out of debt today!