- 1). Create a household budget. Calculate your monthly income including paychecks, child support, alimony and any side income you receive on a regular basis. Write the total number down.
- 2). Create a list of your household expenses, including rent or mortgage payments, utilities, Internet fees, cable fees and groceries.
- 3). Create a list of other expenses you have, including car payments, insurance, gasoline, childcare services or monthly contributions to savings accounts.
- 4). Create a list of the minimum amount due on all of your current debts and the due date for each.
- 5). Subtract your household expenses, other expenses and minimum payment amounts from your total income to determine how much excess income you have in a month.
- 6). Apply your excess income to the smallest debt, such as a credit card. Pay the minimum amount due for this debt plus your excess income by the due date.
- 7). Pay the minimum amount due by the due date for all of your other debts.
- 8). Repeat steps six and seven until you pay off the smallest debt.
- 9). Apply your excess income to the second smallest debt and continue paying monthly until you pay off the debt entirely. Repeat this process for every debt you have.
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