Currently many people experience high levels of debt as a result of too many credit cards, store cards, personal loans and mortgage loans as well. To make matters worse rising fuel and energy costs and the state of the economy are making life very difficult for people across the world.

The situation has been exacerbated by the ease at which financial institutions granted credit , resulting in many households being swamped by a mountain of debt payments. In some cases too much debt has resulted in social upheaval such as worker’s strikes.

The availability of credit can be a major boon to an economy, however we are fast approaching levels of debt that threaten to strangle economic growth. It is important that consumers are made aware of the problem and take steps to manage their debt exposure.

Here’s what you can do if you feel like you are being swamped by a mountain of debt.

Break the cycle: many consumers have gotten used to just swiping the credit or store card without a second thought. In order to stop the problem you need to break your spending habit. Start by developing a budget and know what you spend each month.

I some cases if your budget isn’t balanced you will need to make some adjustments, either increase your income (extremely difficult) or cut your expenditure. Identify luxury items that you can do without and eliminate these.

Settle Your Debts: after you have developed a budget you need to identify your most expensive debts and settle these first, put your credit cards in a safe place and only keep these for emergencies. Cut up your store cards – this will remove the temptation to spend when you don’t have money. By not adding to the mountain of debt every month you are on your way to solving your debt problem.

You should also focus on reducing the debt by making additional payments – start with the most expensive debt first.

The key to financial independence is to reduce your reliance on expensive debt. Once you have reduced your debts you need to start saving surplus funds. Don’t fall into the trap of replacing old debts with new debts as you will end up perpetuating the problem.

One of the best ways to save is to make additional payments into your mortgage loan; other options are to invest in unit trust or even shares if you have the know-how and ability to manage a portfolio.

If you are still struggling with debt after making use of these steps you may need to consult a Debt Counselor who will assist you in restructuring your debts and help you with a financial plan.