One of the reasons people avoid facing their debt problems is because the task of sorting them can seem huge, sometimes impossible. It’s worth remembering we’re more likely to feel overwhelmed at the thought of a ballpark debt figure – a figure our anxiety is likely to inflate – than a clear total written out in black and white.

For this reason, the first thing we recommend doing is getting organised. This process can be as simple as gathering your latest statements from your lenders and manually recording the amounts you owe (and the company names) in a notebook.

Some people prefer to use spreadsheets or personal finance software to get things organised. Bear in mind, your method of recording is much less important than how accurate your information is. Where possible, sign up for online access to your accounts with each lender, so you can be sure the outstanding balance figures are correct and up to date as you record them.

 Budgeting is a skill. The more you do it, the easier it gets. If it’s something you haven’t tried or haven’t done for a while, these six steps are a good way to start:

1. Book out time

  • If you set aside time to work out your finances, you’re more likely to do it. It’s easy to make excuses and dodge something you’re not looking forward to. Booking out a sensible slot means time and other demands don’t get in the way. Give yourself two or three hours to go through everything.

  • Make it as pleasant an experience as possible. Grab a hot drink, a tidy table (maybe even a couple of biscuits) and settle in. As you start making progress, you might feel positive about getting things in order. When you’re done, especially if it’s been a challenge, you’ll almost certainly feel a bit better.

  • Set a ‘money managing’ reminder on your phone. Add a recurring appointment so you remember to put time aside for tracking your income and outgoings every month.

2. Get everything together

  • Grab a notebook, spreadsheet or even a scrap of paper so you can do your working out. A calculator can also get you through the adding-up faster.

  • If you think it might be useful, have a look at one of the many budget calculators available online.

  • Write down exactly what’s coming in each month: salary, benefits, pensions, plus anything else you can think of. Make sure you list everything separately.

  • Your bank statement, if you’ve got one, is a great place to start. It’ll show exactly what’s coming in and going out each month.

3. List your essentials

  • Sort out fixed costs first: rent, mortgage, water, council tax, TV licence etc.

  • Where you’re giving an estimate – like food shopping or your phone bill – it’s important to be as realistic. If you over-budget, you’ll have that much less money to put towards your debt; under-budget and your repayment ideas will be unrealistic.

  • Consider the season. If you pay quarterly or on a meter for your gas and electricity, the time of the year will make a big difference.

4. List your non-essentials

  • You might not see them as non-essential, but tot up what you’re spending on things like clothes and going out, as well as entertainment like books, films, magazines, games etc. You might be surprised how costs for things like magazines really add up.

  • Have a look at previous bank statements, if you have them. We often spend on things we forget about. You might even find old direct debit payments you’ve not cancelled.

  • Add them all together. Include other loans, overdrafts and other debts in this section.

5. Do the maths

  • Take away the total amount you spend from your monthly income.

  • This will give you a better idea of where the pinch-points are and where you could potentially save money.

  • Getting an accurate view of what you’ve got coming in and where you spend the most is an important step towards getting on track. Having a budget won’t do any good if you’ve not got a clear and up-to-date view of what you’re spending.

6. Keep going

  • If you track what you’re spending each month, you’ll be able to see if you’ve got a problem and where it’s coming from.

  • If you can, make a habit of keeping receipts and writing down what you’re spending each week.

  • Set up weekly calendar reminders on your phone to help you keep on track.

  • There are lots of tools, tips and hacks on our site to help you save money on essential and non-essential spending.

  • Once you catch the budgeting bug, tracking your spending will become second nature. Soon there’ll be no stopping you.

Once you’ve got a clearer view and you’ve named and calculated your debts, your next step is to work out how this total fits in with the rest of your finances.