WHAT IF YOU OWE TOO MUCH?
If you've followed the tips in this section and you still can't figure out how to make ends meet, there are other things you can do to get out of debt. Reputable creditors don't want to send accounts to a debt collector. They would rather work directly with you. If you can't make your payments, call your creditors before they call you. Your credit card company will be happy to hear from you. You may be able to arrange a payment plan that will work to your advantage.

Working with your creditors
Don't be afraid to work with your creditors to devise a way to pay off your debt. Come up with a plan you can present to them. You may want to pay an equal amount monthly to each creditor, or pay more to the creditor charging the highest interest rate.
The first step is to call each creditor. Tell them you want to pay in full but you need more time to pay. Explain your problem. Let them know you've taken steps to reduce your spending. Present your plan and ask for their cooperation. You'll find that most creditors will help. They want to get paid, so they will work with people who are truly interested in getting out of debt. For the record, send each creditor a letter with the details you've discussed. If you can, include a payment with your letter. Even a small payment shows you're serious about paying back the debt in full.
Not all creditors will react well to your call, but persist. Don't get emotional. Use logic and be reasonable. Be prepared to compromise.

Debt reduction options
Repairing your credit situation usually involves rescheduling of payments.
Creditors may offer you one of several options：

• Loan or credit card extension；This is an extra 30 or 60 days to make a required payment. Some creditors require no payment in that period, others may want partial payment or ask you to pay interest or service charges.
• Loan or credit card revision：The creditor may be willing to lower your monthly payments by extending the term of the loan. You may pay more interest, but lower payments may enable you to make payments on time.
• Loan refinancing：A refinanced loan is a new loan, not just a revision. The new loan will have a new payment schedule and a new interest rate reflecting current interest rates.
• Consolidation loan：This is a new loan designed to pay off a number of existing debts. The new monthly payment will be less than the total amount you're paying now, because you'll be extending your payments over a longer period of time. A consolidation loan can help take care of payment problems before you become delinquent. But it can be a problem if it makes you believe you have extra money to take on new debts.
• Home equity loan or credit line： If you're a homeowner, your creditor may extend you a line of credit or a loan secured by the equity in your home. These usually have lower interest rates and the interest may be tax-deductible. But be careful - if you land deeper in debt, you could lose your home.

Step 1: Set your goals
The first thing you need to do is identify your goals -- new home, early retirement, even an education. You can group your goals into three areas: short-term, mid-term and longterm financial goals. Ask yourself: What's important to me? What do I need? What do I want? Your answers to these questions will help define your goals. If you're married, you and your spouse should discuss your answers and decide what your shared goals will be.

• Short-term goals：These are goals that you'll achieve within the next year, give or take a few months. They may include paying off credit card dues, purchasing a new television or refrigerator, or saving for a vacation.
• Mid-term goals：These are goals that you want to achieve in the next two or five years. For example, you may
  want to save for a downpayment on a house or new furniture for your home.
• Long-term goals：These are goals that take more than five years to reach. Retirement savings and college expenses are common examples.

Step 2: Gather information
Pull together the records of all of your household income and expenses. Be thorough and honest when estimating
any expenses. Your budget should be an accurate picture, not a “best-case scenario” Gather the following：

• Pay slips
• Your income tax return
• Checkbook records
• Credit card statements
• Payment information for major purchases such as car loans
• Financial statements from banks and financial institutions
Step 3: Find out where you stand
After you've collected all of the information, you can see the relationship between your income and expenses. It is alright to use estimates for your first budget calculation. It may take a few months to find out exactly where you
stand, but this exercise should give you a good idea of your spending habits.

ORGANIZE YOUR INFORMATION
You should organize your information into three sections. These three sections will be used to make up your budget.

• What you earn: Add your income from various sources, including “takehome pay” after taxes, commissions or bonuses, Social Security or retirement benefits, disability benefits, interest income, dividends, etc.
• What you spend: Add your fixed and variable expenses. Fixed expenses are those payments whose amounts don't change every month (rent, mortgage, insurance, loan payments, retirement savings, etc.) and usually cannot be eliminated. Variable expenses are those that change (cable television, groceries, gas for your car, telephone, etc.) and could be reduced or eliminated.
• The bottom line: Subtract total expenses from total income. The amount left over is called “discretionary income”. This is the money that you can use for emergencies and meeting budget goals.

Step 4: Check your bottom line
Your bottom line is the difference between what you earn and what you spend. It tells you if you're spending too much. If the figure is positive, you can increase the amount you pay for debt or credit card dues, or add more to your savings. If the figure is negative, you are spending more than you earn and probably paying for the difference using credit.

Step 5: Keep track of expenses
After you do your first budget calculation, start keeping a monthly expense record. Even if your bottom line is positive, it's still important to learn everything you can about how you spend your money.

Carry a small notebook everywhere and record all purchases and withdrawals. You'll be amazed at what you learn about your spending habits. For example, many people find that they spend thousands of pesos each year on snacks, clothes or cellular phone bills. People usually get into trouble with non-essentials -- the things they could easily do without. The goal of tracking expenses is to understand where you're spending your money.
If you feel that your finances are getting out of control, take the steps on budgeting and planning enumerated in this section to help you regain financial control. You may need a few months to improve your spending habits.
Keep adjusting until you have the plan that works best for you.
Getting spending under control is not easy, so include your family in all plans. They can help you sort out your finances. Besides, the changes you make willaffect them too, so get them involved in the budgeting process.