Owing money or falling behind on repayments can be stressful. The good news is there are steps you can take to get out of debt — and stay out of debt.

If you're in crisis and struggling to make ends meet, there are services to help with food, bills, housing, and emotional support. See urgent help with money.

1. Know what you owe

The first step is to get a clear picture of what you owe.

Make a list of all your debts, showing:

• how much each debt is
• the minimum monthly repayment (if any)
• when the payment is due

Include buy now pay later, credit cards, loan repayments, unpaid bills, fines and any other money you owe.

Then add up all the debts to see how much you owe in total. If it feels a bit scary at first, remind yourself that you're taking charge of your money. And that's a good thing.

2. Get help if you need it

If it feels like you owe a lot, you may be tempted by a quick-fix solution. Like taking out a payday loan or increasing your credit card limit.

Before you jump into anything, talk to a financial counsellor. They can explain your options and help you make a plan to get your finances back on track. This is a free service.

To get free, confidential help, call the National Debt Helpline on 1800 007 007. The helpline is open Monday to Friday, 9:30am to 4:30pm. Or live chat, Monday to Friday, 9:00am to 8:00pm.

You can also call Way Forward on 1300 045 502. Monday to Friday, 9:00am to 7:00pm. If you need support to manage debts, they can arrange a debt repayment plan on your behalf. This is a free service.

3. Work out what you can afford to pay

The next step is to work out how much you can afford to pay towards your debts.

Compare money in and money out

The easiest way to do this is to do a budget.

List all the money:

• coming in (income) — such as salary, pension or benefit payments
• going out (debts and expenses) — like food, rent or mortgage, buy now pay later, credit card, electricity, gas, phone, transport

Add these up, then compare money in and money out.

Make savings or cuts

Do you have more money going out than coming in? Or are your expenses higher than you'd like them to be? If so, it's time to make some choices.

What are:

• needs — can't do without
• wants — could do without, at least for a while

Find some expenses that you can cut. Be realistic — don't make it impossible to stick to.

For quick ways to cut back on spending, see simple ways to save money.

Work out your 'debt money'

When you've made your spending cuts, subtract money going out from money coming in.

The amount left over is how much you can pay towards your debt each month. This is your 'debt money'.

4. Prioritise your debt and bills

Now that you've worked out your debt money, the next step is to prioritise your debt and bills.

Work out what to pay first

Higher priorities include:

• rent or mortgage payments
• council rates and body corporate fees
• electricity, gas, water and phone
• car repayments — if you need your car for work or essential travel

The National Debt Helpline has a step-by-step guide to help you to prioritise your debts.

Plan your higher priority payments

Using your debt money, make a plan to pay your higher priority payments first.

If you're finding it hard to pay a big bill, contact your provider. Ask if you can get an extension or pay in instalments.

Try setting calendar reminders for when your priority payments are next due.

5. Start small and snowball your payments

Now you've got your bills prioritised and your debt money sorted, you're ready to get rolling on your repayments.

The quickest — and most motivating — way to get out of debt is the snowball method. You start small, and pay off your debts one by one. This is great for paying off credit card or personal loan debt.

Here's how it works:

• List your debts — in order from smallest to largest.
• Pay the minimum — using your debt money, pay the minimum amount due on all debts each month.
• Pay off the smallest debt first — use the rest of your debt money to pay off the smallest debt. Pay as much as you can each month, until you clear it.
• Celebrate and repeat — when you've paid off that debt, reward yourself by doing something you enjoy. This will inspire you to keep going. Then move onto paying off the next smallest debt, and so on

6. Get a savings mindset

When you've got your debt under control, keep the momentum going. Saving regularly will help you avoid money problems in future.

To start:

• Save for an emergency fund to build a safety net for unexpected expenses.
• Open a savings account to start putting a little bit aside.

Then think about how to grow your money to achieve a goal. Such as buying a car, paying for education, or saving for a house deposit.