If you are carrying a lot of debt or a little and you want to put all the payments in one place, this page will give you a few ideas on how to consolidate debt yourself.

Almost all households carry debt of some kind between mortgages, car payments, credit cards, and other expenses. While some reports indicate that a majority of households carry debt at a good ratio compared to income, other statistics indicate that the average credit card debt is $8,000 or more. http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp They are both true, depending on how you look at the data. Many middle-income families carry a small debt to income ratio. Unfortunately, the households that carry the large debt often fall into the category of lower income. Therefore, they have a harder time getting out of debt.

What Do You Need to Know About Debt? Debt is often the result of overspending and lack of saving. Debt itself is a problem, but it is really the symptom of a deeper problem; poor money habits. Some people might think that the answer is to use a debt consolidation company. However, this route may cause more problems in the long run. These companies help you move your debt around from one place to another, but they do not really help you learn how to reduce your debt. In fact, debt consolidation companies make money because they actually help you to stay in debt longer. When you consolidate debt into one payment, you may be paying less per month but you will wind up paying on the debt longer, and therefore actually paying more money on the life of the debt.

Do You Need to Use Professional Debt Consolidators? The quick answer is no. Debt consolidators will tell you that they can help you fix your debt. Unfortunately, most of the time your credit ends up worse than before. Besides making your credit score worse by withholding money to creditors, debt consolidation loans get you lower monthly payments by extending the length of the loan. Therefore, you are actually increasing how much you are paying back.

What Can You do to Help Yourself? There are a few simple steps to help you learn how to consolidate debt yourself. While the steps are simple they will not necessarily be easy and may take some time to work through. http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P36230.asp

The first step in dealing with any problem is acknowledging that there is a problem. If you don’t know how much you are in debt then you will have a difficult time trying to fix it. You can use a paper and pencil to figure this out or there are many online debt evaluation calculators that can help you figure out exactly how much you owe.

To do this, make a list of all of your debts from highest interest to lowest interest. Knowing how much you actually owe can accomplish a few things:

1. It will help you realize your financial fitness. Is it as bad as you thought? Is it worse? Are you on firm financial ground?
2. It will give you an idea of your debt to income ratio. If you have a very high debt to income ratio, it may be very difficult to transfer the debt to into a consolidation loan.
3. It will also help you figure out which bills will need to be paid down first.

By gathering all of this information together, you can make use of free internet resources such as a debt payment calculator or a debt time frame calculator. These will help you determine if you even need to use debt consolidation.

First you need to write down how much income is coming in. Then you need to deduct the expenses. If you do not already know how much money you are putting out daily, weekly, monthly, and yearly, you may need to start a finance diary. This entails writing down all of the money you spend for a certain amount of time, maybe a week or a month. Here you can find out what your real expenses are. What is left is what you will use to pay down the debt.

An important part of creating a budget is to prioritize your debt. Liz Pulliam Weston from MSN Money has a list of money priorities for the average consumer.http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/the-9-step-guide-to-your-finances.aspx

To get a handle on your money and your debt, first you must prioritize:

1. Pay your bills – rent or mortgage, utilities, car loan, and any insurance premiums (car, health, home or renter, life or term)
2. Create an emergency fund of at least $500. Even taking as little as $10 a week or a month and setting it aside will help.

After you have a handle on how much money you owe in debt, you can decide how to pay off the debt.

Contact Consumer Credit Counseling Services (CCCS) or the National Foundation for Credit Counseling (NFCC) for help. Both are non-profit organizations that help consumers nationwide who want to get out of debt.

If you believe that consolidating is for you, there are a few ways to go about moving your money around on your own.

You can try for the low interest rates that credit cards offer to move previous balances into them. However, there are a few catches. First, these introductory offers do not last long. You will then have to move the money again or pay a much higher interest rate. Second, if you have bad credit to begin with, you may not qualify for these cards. http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P36230.asp

While one payment is easier to have than several, it is important to keep in mind that debt on a credit card, while annoying, cannot affect your home. Your credit score will be adversely affected but your actual home and possessions are safe from these creditors. This may not be so if you move the debt into a home equity loan or a personal loan.

Another way to consolidate your debt is to take out a home equity loan if you have good equity in your house. This is only advisable if you are able to truly change your spending habits and not acquire new debt. When you pay off credit card debt with a home equity loan and wind up defaulting on the loan, you can lose your house.

Another way is to borrow from your retirement savings. Again, this is not overly advisable by many money gurus because losing money in your retirement savings is difficult to recover from. If you lose money from your retirement savings, it will be difficult to live later on when you are earning less money than now.

You can talk to your personal bank or credit union about personal loans, and about refinancing existing loans such as car loans.

The only way to make your debt consolidation beneficial is to not build the debt back up. An average of 78% of people who consolidate debt using debt consolidation companies regain the debt over a short period of time. The real solution to long term financial security is to change spending habits, work within your budget, and live on less than you make. This may seem difficult at first, but it will be beneficial in the long run.