The savings rate is at the lowest its ever been, with many people struggling to make ends meet, let alone saving two or three months of wages as an emergency fund.

Because of low savings, a minor financial change or setback could cause a consumer to spend unnecessary money and put themselves in more debt. Suddenly you start to only pay the minimum due on your credit card which, in the future, adds up to more debt in the form of interest.

But never fear. There is always ways to prevent such dire consequences as these, as long as you do some sensible financial planning. Firstly, start out with a monthly budget. If you are like most people, you probably don’t have a clue where your money goes every month. Getting to grips with your monthly spending is the first step to being financial stable.

When you try to dig yourself out of debt, it is important to put extra money towards your debt payments. The faster you pay off your debt, the sooner you can plan your financial future. A possible option would be to take on a part time job to earn extra money. Any extra money you earn should be used to pay off your debt.

Even if getting a second job is not possible, you can still pay off your debt. Contact your credit card company or bank and negotiate with them if there is a problem they can sort out for you. Credit card companies are usually very willing to help their customers pay off their balance; it is their money after all.

What many people don’t know is that many credit card companies are willing to offer you a lower interest rate, lower monthly payments, or even accept a lower percentage of what you owe. Don’t be embarrassed to ask your creditors for better rates. It will only help your situation.

If you feel you cannot negotiate with your creditors on your own, a qualified credit counsellor can be called upon to negotiate on your behalf. These credit counsellors are experts at negotiating with banks and credit card companies. They can negotiate excellent repayment terms, one that will suit your finances. But it is up to you to make the first step to digging yourself out of debt.