Just so we’re clear: debt is not in itself bad. You can often make your life better with a loan – whether it's for something you want, something you need, or to help further your education, or even to revamp your home to earn extra income.

Where debt becomes a problem is when you’re struggling to make all your payments, or you owe more in repayments than you can afford. If this sounds familiar, it’s time to take action and face up to your debt demons. And the best place to start is to set some goals and create a plan of action.

Assess the mess

Start by listing what you owe, who you owe, how much you pay every month and the amounts outstanding.

Make a commitment

Take stock

Before you continue, you need to review your monthly income and expenses to see where your money is being spent. Outside of debt repayments, you have to cut your monthly spend.

Rank the (interest) rate

When collecting the information on your loans, you must also find out what interest rate you’re being charged on each loan or card. If your ultimate goal is to get rid of your debt, and save money, then it’s always best to first pay off the debt with the highest interest rate.

Pick the low-hanging fruit

An alternative approach is to motivate yourself by finding the smallest debts and settling them as quickly as you can. Use this sense of achievement, and the money you’ve freed up, to stick to your plan of cutting your debt.

Pick up pace

As you finish paying off each debt, that ‘extra’ money should be used to pay back more than your monthly minimum on remaining loans. This will speed up the process of reducing your debt.

The most important attribute you’ll need to make this plan work is perseverance. Only by paying regularly and according to your plan can you set yourself financially free.