Quote of the week: "A man in debt is so far a slave".~ Ralph Waldo Emerson

If you are always finding yourself asking for an overdraft or racking up credit card debt, it may be time to address your finances. To get out of debt, you need a plan that you can execute. However, this is easier said than done. It may seem hard to take control of a financial problem, but it is possible to achieve with strategic changes to your daily routine. To help you get started and stay on track:-

Step 1: Confront Debt!

Sit down and work out exactly how much and who you owe . Be honest to avoid piling up more problems for the future. If your debt repayments take more than 20 per cent of your net monthly income you are in a danger zone and must take steps to cut back.

Step 2: Budget

Once you know how much you owe you can draft a budget, including a schedule for repaying your debts. Be realistic and work out what you can afford to repay without overstretching yourself.

Step 3: Do Not Take on More Debt

Do not borrow any money or take on more debt until you have repaid what you already owe.

Step 4: Watch Your Daily Spending

Take a set amount of money out of the bank at the beginning of the week and give your ATM card to a friend or family member for safe-keeping. That way, you avoid spending more than what you have in cash.

Step 5: Organize Your Bills

Make sure you automate payment of all your utility bills. It is much easier to manage as you will not have to worry about sending cheques on time. This is also cheaper as you are more likely to avoid late fees and other penalties like power disconnections.

Step 7: Switch To A Cheaper Credit Card/ Loan

Try different service providers and you will probably be able to find a credit card or loan with a better rate than you are currently paying.

Step 8: Stay Informed

Ensure that you stay abreast of developments in the financial services industry. If you invest or bank with an institution without researching on the different market offerings, you may not be getting the best terms on interest rates you pay on loans or earn on your savings. Earning higher interest rates will increase resources available to pay off debt.

Avoid borrowing to keep up with trends and other lifestyle issues that you want but can do without.

Zimele offers practical personal finance advice and solutions based on your needs. You can send your comments or questions to This email address is being protected from spambots. You need JavaScript enabled to view it. , or visit our offices at Ecobank towers, 7th floor, MuindiMbingu street for more information on financial planning. You can also follow us on our facebook page- Zimele Asset Management ( Kenya)