How to clear your credit cards

Set aside some time to concentrate on this. Use your paperwork, your bank statements and some extra thought to work out how much of your income goes towards meeting your compulsory outgoings; these are the payments that you have to make each month without fail.

You need to include:

• Rent/mortgage payments
• Utility bills (gas, electricity, water)
• Council tax
• Debt repayments
• Insurance
• Medical prescriptions and eye glasses
• National insurance (if self-employed)
• Child care costs
• Child maintenance costs

The easiest way to do this is to create a budget spreadsheet that you can update on a regular basis (although a pen and paper is equally as good!).

You'll need to divide this into 3 columns:

• what you pay out for
• how much you pay
• when you make the payment

Fill in details of your compulsory outgoings accordingly.

If you have a weekly figure, times that by four to produce the monthly figure. Equally if you pay a bill quarterly, divide it by three to get a monthly figure. For annual payments, divide the payment by 12 to get the monthly sum.