Managing your debt in a sensible way will keep you out of financial trouble. Look at the steps below and find out how to control your debt.

First, do your debt evaluation.
Write down for each credit card, store card and unsecured personal loans following:

- Current Debt Balance
- Interest Rates Charged
- Monthly Payments Due

Do your household budget (cost per month):

- rent or mortgage
- food
- utility bills (electricity, water. etc)
- car expenses (petrol, service, insurance)
- medical bills
- childcare bills
- any other monthly bills
- credit card 1
- credit card 2
- personal loan

Now subtract all the above bills from your monthly income, that will leave you with your Monthly Disposable Income. This is the extra money you use to pay your debts. You can adjust spending on the above bills so you can have more or less money as your Monthly Disposable Income.

Most of your Monthly Disposable Income should be used first to pay your debts with the highest interest rate. Credit card debt has usually the highest interest rate, although some personal loans debt may have interest rate as high as 29%.

Monthly expenses	Amount per month
rent or mortgage	$1,200
food	$1,150
utility bills (electricity, water. etc)	$105
car expenses (petrol, service, insurance)	$285
medical bills	$35
childcare bills	$110
any other monthly bills	$0
credit card 1	$55
credit card 2	$78
personal loan	$285
TOTAL	$3,303

In this example we are assuming that your monthly income after tax is $4,000. Your monthly expenses are $3,303.

So, to calculate your Monthly Disposable Income we subtract your monthly expenses from your monthly after tax income: $4,000 - $3,303 = $697.

It looks simple, however if you can stick with your budget you will soon have no more debts. You can beat bad debt with careful budgeting.