If you're like most people you probably have debt in your life. You can either buy a place to live or rent, but both are a form of debt. Unless you are very disciplined, you will probably need to borrow to buy a car for transportation. Even if you attend a low-cost college, you might not escape without some loans. Many students must seek debt consolidation for their student loans. These are realities. The three big debts for most people are housing, transportation and education.
You also have bills that are technically debt, like your electric bill. Even though it would be nice to live with none of these debts, it's not realistic for most people. So you have to go with plan B (and sometimes debt consolidation).
Your goal is to live without unnecessary debts and debt consolidation could help you do this. "Unnecessary debts" are things like credit cards, loans for a new roof, furniture financing, and so on. Normally these are small debts that seemed good at the time, but have gotten out of control. Sometimes they represent necessary purchases, like new tires, but the way that they are handled has turned them into a burden. Debt consolidation will not reduce the burden, but it will make simpler to manage.
Steps to taking back your life
1. Gather your bills and a list of monthly debts.
2. Sort them out into two piles: one for monthly bills you cannot change and one for everything else (the bills eligible for debt consolidation). For Example: Pile 1: Mortgage Note, Electric Bill, Water Bill, Gas Bill, Child Support, Phone Bill, ... (not eligible for debt consolidation, though you might find ways to reduce them or do without) and Pile 2: Credit Cards, Lines of Credit, small loans, ... (these are eligible for debt consolidation).
3. Get three pieces of paper.
4. Write "Stuck With" on the top of one piece of paper. List all the bills in Pile 1. Add them up and circle the total. If this number is bigger than your take-home pay, stop. Find a financial professional or certified credit counselor. Right now. Be scared, because you aren't making it.
5. Write "Manage" on the top of another piece of paper. List the items in Pile 2. This is the list you can work on (budget, pay off or debt consolidation). Just to see where you are, add up this page and circle the total.
6. On the Third piece of paper, write "Worksheet". Use this as a place to figure things out. This page will show you how to use budgeting, payoffs and debt consolidation to your best benefit.
7. On your worksheet, write "Where I Am:" then add the two other pages. Example: Where I Am: $1700 + $750 = $2450
8. How does the number from Step 7 compare to your paycheck? To find out, subtract Step 7 from your paycheck. Example: Paycheck - Payments = $2550 - $2450 = $100